How to Read a Stock Ticker

There was a time when tracking and researching stocks was an almost impossible task. This was because there was no medium available to give the latest and updated stock information. Financial papers were there but they gave information one day after an event happened. In a stock market, where stock prices change every minute, this was seen as a serious limitation. In those days stock trading was driven by rumors and speculation. Often the investors suffered heavy losses or failed to take advantage of a profitable situation due to lack of timely information.

But with the explosion of financial websites and news channels, those days seem like a distant memory from the past. These sites and channels constantly update the stock trading information and financial news so it is now possible to track stocks by the minute.

One of the most common methods used to display stock price movements is a stock ticker. Tickers give latest stock price and volume information and they are displayed on financial websites and channels. You might have seen a running band of strange symbols and numbers on a financial channel or website. That's a stock ticker. These tickers display the latest price and volume information for all stocks and are continuously updated.

How to read a stock ticker?

It is very easy to read a stock ticker. The first thing you must remember is that the tickers display company symbols instead of the company name. All the companies that are traded have their unique symbol assigned to them by the stock exchange.

The next point to remember is there are often two tickers displayed on financial channels or websites. If you have seen any financial channel, you might have seen two bands scrolling across the screen. These two bands represent two different stock exchanges. The upper band displays the trading information for companies traded in New York Stock Exchange (NYSE) while the lower one shows the trading information for companies traded in NASDAQ.

A typical stock ticker shows the following information about a stock:

* Ticker - This is the symbol assigned to a company.
* Number of shares traded - This is the number of shares traded. This is abbreviated for easy reading. "K" stands for thousands, "M" is for millions and "B" is for billion. So 5K means 5,000 shares of the company were traded.
* Price - This shows the last traded price for the stock.
* Change Direction - This shows the direction in which the stock has moved since the last day's closing price. This is represented by a small green triangle pointing upwards or a red triangle pointing downwards. The green triangle indicates that the stock has moved up from the last day's closing price while the red triangle means that the stock has moved down from the last day's closing price.
* Change in Price - This lists the absolute change in the stock price from previous day's closing price. Combined with the green or red triangle, this shows where the stock prices are headed.

The news channels also use color coding to add more features to a stock ticker. If the stock ticker is blue, there is no change in the stock price; if it is green, the stock price has gone up and if it is red, the stock price has gone down.