What is a Price Change?

In the stock market, a price change is the difference in trading prices from one period to the next or the difference between the daily opening and closing prices of a share of stock.

How Does a Price Change Work?

For example, let's say Company XYZ shares opened at $25 this morning and closed at $24.

The price change is -$1, or -$1/$25 = -4%.

Why Does a Price Change Matter?

Price changes are a core component of financial analysis, and predicting price changes can be as, if not more, important than an actual price change.

It is important to remember, however, that percent-based price changes are useful only in the context of the number of dollars involved.

A 75% change in the price of a box of cereal, for example, may only involve a few dollars while a 75% change in the price of Berkshire Hathaway may involve thousands of dollars.

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Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

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