Everything you need to know about stock quotes
When it comes to investment, stock market is one of the most popular avenues. An investor pays a sum of money to buy a few stocks, which then reaps dividends over the investments horizon. Over 5,000 stocks are listed on the exchange. Each needs to be identified in a manner that distinguishes it from the other stocks listed. This is where stock quotes plan a vital role.
What are stock quotes?
You must have seen a ticker on a business news channel on the TV or maybe on the huge billboard outside the BSE, continuously showing a bunch of letters and numbersin green or red color. These are stock quotes. The group of letter you see are called as stock symbol and the numbers that follow show the stock price.
What are stock symbols?
All the companies listed on the exchange have a stock symbol which is a unique code. By knowing the stock symbol of the company, you can easily find out information about it. This is important for investors who want to carry out a financial research before buying a company’s shares. TCS is stock symbol of Tata Consultancy Services and INFY indicated Infosys.
Where are stock quotes available?
Stock quotes are very easily available. Some of the most popular avenues to find stock information are the business new channels and the internet. Business newspapers or pink papers also regularly publish a list of stock quotes, termed as the stock table.
Why should I read a stock quote?
When investing in a stock, you must be aware of the stock price as well as its historical trends. This is important if you want to invest in a valuable company at the right time. With this you can ensure that you get the stock as well as its price right. Always keep in mind, that in order to maximize your profits in the stock market, you must buy at lows and sell at highs. So, timing is crucial.A stock quote provides you the information needed to make this buying/selling decision.
So, you need to constantly track stocks for a period of time before deciding to buy or sell. Tracking stocks allows you book profits from the best stock opportunities available in the market. It also assists you in knowing how the stocks in your portfolio are performing.
How to read stock quotes?
The stock table- available online and in financial papers- contains the details of all stocks. It can be slightly confusing to understand. It has the following elements.
- Company name and symbol
As discussed above every listed company has its unique code which is called as company symbol. So, you need to know the company symbol to read its stock quote.
Share prices keep changing during marker hours as more trades are carried out. This is because buying increases the value of the stock, while selling decreases its value. This in turn affects its price. In the stock table both highest and lowest prices the stock hit on a particular day are mentioned, this helps investor in comparison. If the share price is continuously increases, the ‘high’ would keep rising. Similarly, the ‘low’ would keep dropping in a down market. Once the market closes, the difference between the highest and lowest prices tell about the volatility in the stock’s price.
- Net change
The closing price also assists you calculate how much the price of the stock has changed. This change is written in absolute value format as well as percentage format. To get the percentage change, today’s price is subtracted from the previous closing price and then divided with the closing price to get the percentage change. A positive change signifies the stock price has increased from the last day. When the net change is positive, green color is used to write the stock, while red color is used when the share price falls.
- Dividend details
Dividend is the portion of profit that companies distribute to shareholders. While an investor holds the share, dividends are the main source of income. This is really important for long-term investors. This is because high dividends meangreater returns for the investor. Due to this reason, many stock quotes mention the dividend yield, which assists compare the dividend with the share price.
- Stock price
This is the price a trader or investor pays to buy a single share of the company. During market hours, this fluctuates constantly, and when markets are shut for trading it remains constant. It shows the value the market has allotted to the company.
When the market is closed for trading stock prices stop fluctuating. The ‘close’ or ‘closing price’ therefore showsthe last price at which the stock traded.During the market hours, it shows the closing price of the previous day, again giving trader a benchmark to compare against.
- 52-week high/low
This shows the highest and lowest stock price in 52 weeks or one year. This too assists the investor understand the stock’s trading range over a larger span of time.
- PE Ratio
This is the amount an investor pays for every rupee the company earns. Stock price of the company is divided with the earnings per share of the company. This is vital because stock price is a market-assigned value. It mainly depends on market sentiment about the stock, and therefore may not be in sync with the share’s internal value. Therefore, the PE ratio, assists give perspective about the share’s value in comparison to the financial performance of the company. A high PE ratio means the stock is expensive, while a low PE ratio signifies the stock is cheaply available.
If a company has a specified number of shares floated on the exchange, not all of them may be traded in one day. It depends on demand for the stock. This is indicated in the ‘volume’ section of the stock quote, which shows how many stocks changed hands. A higher trading volume is generally followed by a huge change in the stock price.
We hope now you will be able to read stock quotes and decide which stocks can prove most beneficial.
Hope we are able to answer your queries like What are stock quotes, Where are they available, Why should i read a stock quote, How to read stock quotes; if you still have any doubt or query, let us know in below comment section or via our contact form.