Career Advice - A Community Blog

Erik Larson writes about the job market, resume improvement, and career advice

How to Read Stock Information

Written by Erik Larson, Community Blogger | Mar 6, 2018 1:50 AM

Whenever you open a newspaper, turn the TV news on, listen to the radio, or surf the internet, you will likely hear something about the stock market. Even though the majority of people hear something about the stock market on a daily level, a lot of them don't know what it actually represents.

Before you learn about how to read stock information, you will have to clearly know what a stock represents. It is a type of security which represents a claim on part of the earnings and assets of a company. Once you start acquiring more stock, the ownership stake you have in a particular company starts to grow. However, it's important to note that stockholders don't actually own corporations, but rather own shares that were issued by corporations.

Buying a stock can be a very challenging task if you don't know how to read a stock quote. You should never buy a stock simply because someone recommended that you do it. Apart from doing the necessary research on the company, you will also need to read its stock quote.

In case you don't know what a stock quote is, it's basically the price of a certain stock as quoted on the exchange. It is made up of very important stats that help make the buyer an informed decision. Stock quotes are updated in real time, so it's very important that you keep an eye on them before you commit to buying stocks of a certain company. Stock information is easily accessible online and on your smartphone. For example, if you wanted to see stock information about Lloyds Banking Group, you could easily do it through apps such as Capital.

The best way to successfully select good investment opportunities is by using stock quotes to gather information. Even though them may look intimidating at first just remember that you will be able to learn a lot about a company simply by looking at the stock quotes. Also referred to as stock tables, they have 12 columns, with each one containing valuable information.

The first 2 columns represent the highest and lowest prices the stock was traded at throughout the previous 52 weeks. The 3rd column contains information about the company name, as well as the type of stock. If you simply see the name of the company in this column, then you're looking at a common stock. On the other hand, if you notice a symbol, then it is a different type of stock.

The 4th column represents the ticker symbol, which is a unique alphabetic name that is used to identify the stock. When you search for stock quotes online, make sure to search for a specific company by using their ticker symbol. The 5th column holds information about the annual dividend payment per share. Dividends represent payments to stockholders.

The 6th column represents the dividend yield. In other words, it shows the percentage return on the dividend. The 7th column contains information about the price/earnings ratio, which is calculated when the current stock price gets divided by earning per share from the previous four quarters. The 8th column represents the trading volume. The trading volume is basically a figure that shows the number of shares traded for the day. Keep in mind that this figure is listed in hundreds, so you'll need to add two zeros at the end of it to see the exact number of shares traded.

The 9th and 10th columns hold information about the price range at which the stock was traded at during the day. By observing these two columns, you will see the highest and lowest prices people have paid for the stock today. The 11th column represents the last trading price recorded before the market was closed for the day. If you want to buy a stock the next day, know that the price may not be the same as today's closing price, since they're constantly changing. Finally, the 12th column contains information about net change, which represents the dollar value change in the price of a stock from the closing price of the previous day.

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