How to Read and Interpret Stock Prices in the Media
A part of being a stock market investor is knowing how to track the development of stocks and other forms of investments. A smart investor knows how to gather the necessary information to assess the general state of the financial market and its contributing sectors. From this assessment, the investor will be able to make smarter decisions in choosing the best stocks.
As a rookie trader, one of the most important skills you need to learn is analysing and interpreting the data available in various resources. This includes the financial section of newspapers and ticker tapes. Of course, by the time you have mastered this ability, you can proudly proclaim that you have stepped a notch higher as a stock market investor.
Below are steps you can take to learn the fundamentals of interpreting stock market data from various media sources. Whichever is most accessible to you is okay, but knowing how to read and understand all of them is ideal.
The first step is finding which symbol your company’s shares are under. These are usually capital letters given by the stock market exchange where the shares are traded. They may or may not represent the initials of the actual name of the company. You should also know which stock exchange your shares are being traded. Major stock exchanges are the New York Stock (NYSE) and the Nasdaq Stock Exchange (NASDAQ).
For example, Google shares are assigned as NASDAQ:GOOG, while Verizon Communications is assigned by the initials NYSE: VZ. Both are traded on different stock exchanges. Major pharmaceutical company Pfizer (NYSE: PFE) and Southwest Airlines (NYSE:LUV) are on the New York Stock Exchange. Stocks with symbols NASDAQ: INTC for Intel Corporation and NASDAQ:SBUX for Starbucks are on NASDAQ. Take note of the symbols for the company you want to track.
Stock Market Data in the Newspaper
Now that you know the symbol used for the shares you bought, you can easily find their stock data in the financial section of the newspaper. This applies for majority of top US-based and global companies in the stock market. You are most likely to find major international stocks in the Financial Times, International Business Times, or the Wall Street Journal. This is how a common stock table in the paper looks like:
Source: Investopedia Website (link)
- 1 – Highest prices in the past 52 weeks (excluding data from previous day of trade)
- 2 – Lowest prices in the past 52 weeks (excluding data from previous day of trade)
- 3 – Abbreviated company name and stock category
- 4 – Company Symbols
- 5 – Annual dividend per share paid out for each share bought (If this column is empty, no dividends are being paid out to stockholders)
- 6 – Annual dividend per yield (Formula: annual dividend per share ÷ price per share)
- 7 – Price to earnings ratio (P/E)
- 8 – Trading volume or actual number of stocks traded for specified date (to be multiplied by 100)
- 9 – Highest price the stock has been traded throughout specified date
- 10 – Lowest price the stock has been traded throughout specified date
- 11 – Last recorded price the stock was traded for, before the closing of the market for specified date
- 12 – Net change or change in the US dollar value of the stock price in comparison to previous trading day’s closing stock price
Stock Market Data on Tickers
A tick, by definition, is the upward or downward movement of stock prices in the exchange. Ticker tapes are market data reports of the stock prices that you see across various financial networks like news programs, websites and online financial journals. You can usually see these ticker tapes running along the top or bottom part of a news program or financial site. These are consistently up-to-date throughout the trading as stock prices fluctuate in the stock exchanges. Stock data here are reliable and real-time. However, due to obvious physical constraints and the amount of info that continually changes throughout a stock market day, you can only spot a few numbers of stocks in the tickers. Below is an example where we use Microsoft Corporation’s random data:
Source: Investopedia Website (link)
How important is being able to read updated stock market data in the success of a stock trader?
The learning does not stop once you have transacted your purchase of stocks accordingly. You need to constantly stay updated on the current market situation to make smart and swift decisions when significant circumstances arise. Will you buy more stocks from this company? Is it the best time for you to sell your shares? The answers to these questions will come naturally when you are able to follow and interpret stock market data.
Also, aside from checking current trends, a smart trader is a continuous learner. You need to constantly update your basic knowledge of the stock market, acquire additional tips and strategies from reliable sources. You can get invaluable stock market advice from stock market investing books from stock market experts. Finally, lessons from established investment specialists can help you go from beginner to a well-informed, smart investor in way less time than perusing various resources for all the information you need.
Stock Market Investing for Beginners
If you are new in the field of stock market investing, having a basic understanding of terminologies and processes is crucial to getting started the right way. Hence, we have created a FREE eBook packed with essential tips specifically for those who are new to the industry. Grab your copy here today: riskrewardreturn.com
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