A stock ticker is a quick way to see stocks that are changing, and knowing how to read one could be beneficial to your bank account.
Not every stock appears on the ticker. Stocks that have a substantial difference in the share price from the day before or a sudden increase in trading volume appears on the ticker.
Stockbrokers and investors like to watch the stock ticker to get a general feel for the stock market movement. It also helps to watch the ticker to track the momentum (speed of change) for a particular stock.
According to Investopedia, the information appears on a stock ticker in a condensed fashion using abbreviations. Knowing the meanings of the abbreviations is the way to understand the significance of the numbers being reported. Every time the numbers change, it's called a “tick.” This shows the changes from happened previously.
Here are the explanations of the colors, symbols, and terms used:
The first thing to know is the stock symbol, which is usually two or three letters on the New York Stock exchange and four letters on the NASDAQ exchange. On NASDAQ, five letters for a stock symbol indicates a foreign investment. If you do not know the stock symbol, go to MarketWatch and use the tool to figure it out.
The price per share is shown in U.S. dollars and cents.
Trading Volume (Vol)
This is the number of shares traded during the previous day's full market session. A stock with a high volume indicates increased levels of interest in buying or selling a stock. A stock that has sudden increases and/or decreased in the number of shares traded is considered volatile and less predictable.
Color, Share Price, and Percentage (%) Change
A green color for a tick, or an up arrow, indicates a positive change in the share price. A red color, or a down arrow, indicates the share price has gone down. An orange color indicates no change in price. The price is shown and the percent change is shown.
52-Week and Daily Hi/Lo
There may also be the 52-week highest share price and 52-week lowest share price shown on the ticker. Additionally, there is the high and the low for the day.
Dividend (div) and Yield (YLD)
Some stocks pay a dividend. The dividend is paid out annually by the company and the yield is the percentage return on the investment. Higher yield is better.
This is a calculation that is used for analysis of the share price compared to the company’s earnings. A higher P/E means the stock is more expensive when compared to others with a lower P/E.
Close and Net Change (Net Chg)
This shows the closing price when the market finished trading for the previous day along with the change in price. This helps to indicate the direction the share price is moving.
If you can get a handle on this, you can understand the basics of reading a stock ticker.