How to Read Stock Market Quotes

Video Transcript

"Hi I'm Roger Groh with Groh Asset and today we're here to talk about stock quotes. How you can find them and what they can do for you. Well clearly if you look in your local newspaper, usually in the business section there will be a list of larger companies that are public and having closing bid and ask prices in them. What's bid and ask? Well that's what somebody wants to sell their stock for and ask is what somebody's willing to pay for it. And the spread in there is what creates the stock market because it is a trading activity. Now when you do that though, the prices that you're looking at are old. They might be from yesterday, they might be from several days ago if there has been a holiday for instance going on. To get a more up to date quote, you need to go online either to the stock brokerage firm where you do business or an online trading system in the country where you're considering making an investment. If you're here in the United States and you're thinking about buying stock outside the US and you're looking at prices here, chances are the data that you see is at least a day old meaning it's not up to date. So you need to be very careful about the numbers that are reflected on there. Even if you go online and you're looking at one of the major trading firms here in the United States such as Bloomberg or Reuters, on the public parts anyway, chances are that data is at least 15 minutes old, maybe a half an hour old. So again, be very careful what you pay for. Now what typically else do you find in a stock quote? Well they usually tell you the number of shares that have traded that day over an exchange. They might give you an idea of the history of it where what the highest price has been in the last year and perhaps what the lowest price has been. And then they attempt to show you some value statistics on the price earning ratio of that company. And last, perhaps they tell you what the dividends are as a percentage of the stock price or yield. So all of those are guides, there's no substitute for doing your homework. Remember the data that you see is not the data that the pros see. The pros see rapid up to the moment data. You the public do not. And if you really want help, go to a pro. I'm Roger Groh with Groh Asset and thank you very much for spending time with me."