How to Read Stocks

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Stock quotes and charts are often found in the financial section of a newspaper, financial magazine or online. These charts provide details on the trends and stock prices of companies that trade stocks in the public trading markets, and the chart is organized in a standardized format of 12 columns for easy reading. If you've invested in the stock market or are interested in learning more about a company's value, you will need to consult the stock table or stock quotes. Here's how to read the stock charts and quote tables to find the information you need.

Things You'll Need

  • Magnifying glass
  • Ruler
  • Locate a company stock by reviewing the third column. The third column on the stock charts lists a company's name. This is usually a shortened version of the company name.

  • Recognize the company's ticker symbol. The ticker symbol is another way to identify a company quickly when reviewing stock charts and is listed in the fourth column. This is made of three letters of the alphabet and is used as an identification symbol for trading purposes around the world.

  • Review the first two columns. The first and second columns show the highest and lowest stock prices over the course of the previous year. These numbers indicate the closing price 48 hours before the current day and give you an idea of the average range of a particular stock.

  • Determine whether the company pays dividends. A number listed in the fifth column displays the dividend per share. This is the amount of dividends paid out per share over the course of a year.

  • Determine the dividend yield. This percentage is listed in the sixth column and is a calculation of the annual dividends paid out per share each year. A high dividend yield means an investment in this type of stock may be stronger than others.

  • Review the price/earnings ratio. The P/E ratio is calculated by dividing the stock price by the earnings per share. A high P/E ratio can be an indication of positive growth of a company. This information can be found in the seventh column.

  • Review the trading volume in the eighth column. Trading volume is an indication of how popular a stock is; you will need to add two '0s' to the figure to determine the actual amount traded on any given day.

  • Review maximum and minimum prices for the trade. The 9th and 10th columns of the stock chart show the highest and lowest price that a stock was traded for. This can help you determine major price fluctuations, shifts or trends.

  • Learn what the closing price on the stock was in the eleventh column. The closing price is the recorded trading price when the markets closed.

  • Learn about the net change of your stock by reviewing the 12th column. The 12th column is an indication of the price changes from the previous day. A positive net change means the stock price increased from the previous day, while a negative net change indicates a decrease.

Tips & Warnings

  • Use a magnifying glass and ruler to help you see the figures for a given stock in a newspaper or publication
  • Monitoring a stock's price, P/E ratio and net change over a period of time can provide insights about a company's performance and ability to generate revenue
  • Consulting with a professional stock trader or financial analyst can help you build your stock portfolio
  • Obtaining your stock quote online is an easy and efficient way to get the data you need
  • The P/E ratio isn't always the most accurate evaluation of a company; you will need to review the P/E ratio over a period of time to analyze the stock's performance
  • The closing price is an estimate of a stock's value for the following morning; this value can change dramatically when the market opens so it is not a guaranteed price

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