How to Read Stock Prices

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The first step to becoming a successful investor is learning to read stock prices. A stock price reflects the cost to buy one share of ownership in a company; publicly traded companies are completely owned by stockholders. Stock prices are constantly fluctuating. The ability to track them and predict the next upturn could lead to instant profitability, but it all begins with the basics.

Reading a Stock Price

Look up the symbol of the company you are interested in on sites like Yahoo's Finance page, eTrade and MSN Money. Use this symbol to locate the stock price for that company on a finance website.

Find the number labeled "Last Trade." This number indicates the last price at which shares of the stock were bought or sold, and it will give you a good idea of the price at which experts value the stock.

Locate the time labeled "Trade Time." This indicates the time the last trade occurred.

Locate the number labeled "Change." This number measures, in dollars, a stock price's change for that day.

Compare the number labeled "Volume" to the number under "Average Volume." This shows how many stocks have changed hands that day compared to the average over an indicated period.

Look at the current price. This is the current established value of a share; the current price multiplied by the total number of shares is equal to the current judged value of an organization.

Tips & Warnings

  • Many online brokerage websites have information for beginners. National news---good or bad---can influence the movement of stock prices. Indexes can be good indicators of stock price movement within a sector. To practice investing, create a free account online at Updown.com.
  • Trading stocks is highly risky. Always make educated decisions when investing. Consulting an expert is recommended.

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