The image above is a stock quote for Google from Yahoo! Finance. Just in this little snapshot, there is a great deal of information to sift through that can tell us a little bit about the stock. We'll work through this example from the top to bottom, left to right so you can learn how to read a stock quote like a pro.
Line 1: Name, Market, Symbol
In the first line, you see the name of the company, the market on which the company's stock trades, and the symbol representing the stock in the market. In this case, we have Google Inc. trading on the NASDAQ market under the symbol GOOG.
Line 2: Real-Time Data
On Yahoo! Finance, they offer a real-time quote that shows the last trade, the dollar change, percent change, and time of the last trade. Reading this, we would say, "Last trade for Google was at $557.20 per share, up $7.10 on the day or 1.29% as of 3:21 p.m. Eastern Time."
Column 1: Last Trade through 1-yr. Target Estimate
Please note that in this example, Yahoo! Finance does not provide real-time data as this is reserved for premium services that we don't subscribe to (that's what online brokers are for). Here's what we see in this first column:
- Last Trade - Obviously this is delayed, but the last trade was at $558.57.
- Trade Time - The trade time of the last trade quoted above was at 3:06 p.m. Eastern Time.
- Change - This is the dollar and percent change based on the delayed last trade and Google was up $8.47 or 1.54%.
- Previous Close - On the last trading day prior to today, Google closed at $550.10 and this is the number used to measure dollar and percent change.
- Open - Though Google closed at $550.10, it opened at $554.89. You might assume that where a stock closes is also where it would open, but thanks to after hours trading and pre-open trading, these numbers can be significantly different. In this case the difference is $4.79.
- Bid - The bid price is the price at which you can sell your shares. The number '100' to the right of the bid price is known as the lot size. One lot is equivalent to 100 shares, so in this case, you could sell up to 10,000 shares of Google at a price of $558.42 if yours was the next order in line. The way to read this is, "Google shares bidding $558.42 by 100."
- Ask - The ask price is the price at which you can buy shares on the market. As discussed immediately above, the lot size is also provided. This would be read as, "Google shares asking $558.80 by 100."
- 1y Target Est - This is the one year target estimate for the share price of Google. It can largely be ignored because it is based on opinions of analysts and if all one year target estimates held true, everyone would be rich as they're often overly optimistic.
Column 2: Day's Range through Dividend and Yield
In the second column are data that are less relevant to executing a trade and provide the baseline for fundamental and technical stock analysis. We'll set that conversation aside for the moment, but here is our quick take on the second column:
- Day's Range - Any range offered is a good measure of volatility and can also tell you how a stock's share price is trending. For a day's range, if the last trade was near the high end of the day's range, the shares have generally trended up for the day. If it's near the low end, it's trending lower. In this case, Google's range was from $551.06 to $559.66.
- 52wk Range - Google's share price has ranged from $375.89 to $629.51 over the last year. Since the last trade was nearer the high end of this range, the shares appear to have strengthened over the last year.
- Volume - This is the day's volume of shares that have traded on the NASDAQ. Thus far, 2,435,607 shares have changed hands.
- Avg Vol (3m) - Over the last three months, Google's volume has averaged 3,520,640. With 2.4 million shares having traded at 3:21 p.m., it's a relatively slow day.
- Market Cap - Market capitalization is the total value of the stock and is calculated by multiplying the number of shares outstanding by the share price of the stock. Google is a behemoth at $177.57 billion in total market capitalization.
- P/E (ttm) - Based on the Google's earnings per share over the last twelve months and its current share price, the stock's price-to-earnings ratio is 25.41. P/E is a key measure of a stocks valuation and can be used against other stocks in an industry to compare whether a stock is under or overvalued.
- EPS (ttm) - In the last twelve months, Google earned $21.99 per share or to put it another way, for every share of stock owned, $21.99 of earnings is 'owned' by that share.
- Div & Yield - This is where any dividend and yield information would be provided. Since Google does not pay a dividend, there is no yield. However, if Google paid an annual dividend of $55.86 per share, this would be a 10% yield as it represents 10% of the shares last trade.
Putting It All Together
In looking at this stock quote, we would say something like, "Google shares last traded at $558.57 at 3:06 pm Eastern Time, a gain of $8.47 or 1.54% on the day. Its previous close was at $550.10 and opened the day at $554.89. Currently the shares are bidding $558.42 by 100 and asking $558.80 by 100. The one year targeted price estimate is $672.67. In today's trading, Google shares ranged from $551.06 up to $559.66 and have a 52-week range of $375.89 up to $629.51. Volume today was 2,435,607 shares with average 3 month volume at 3,520,640 shares traded. Current market cap is $177.57 billion with P/E of 25.41 and earnings per share of $21.99. No dividend is paid at this time."
Sounds like a mouthful, right? Fortunately, only parts of this quote are necessary to get the job done. If you're buying shares, you need only look at the ask. If you're selling shares, look only at the bid. If you're simply interested in what the value of your shares are, check the last trade. The rest of it is good information, but more of a 'nice to know' rather than a 'must know'.
- What does the quote above imply? Is Google having a good day? How about the last year?
- If the lot sizes were different, let's say the bid size was 10 and the ask size was 1,000, is there upward or downward pressure on the price of the stock? Why?
- It appears that the volume is below the three month average. What does this imply about today's trading?
- Google opened higher today than yesterday's close, what events could have caused this to happen?