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Learning Stock Market Data Trading Terms

Posted on May 17, 2011 by Thomas DeGrace

If you are a new investor and intend to take investment seriously you definitely need to understand the stock market data and stock quotes. But understanding the market data and stock quotes is no rocket science. It is simple if you find the right guide.

Understanding Market Data

Earlier the stock quotes used to appear on ticker tapes through the telegraph. But now they appear in the newspapers and on the internet. You can however still see the ticker tape form on television where the stock quotes are flashed across the bottom of the screen of a particular finance related channel. The ticker tape like displays can also be observed outside big financial institutions.

So how do you find a quote? You have to decide upon a particular company that looks promising to you and whose part you want to be. You can go to any finance website and type the name of the company and get the quotes. You can also look at the financial channels as earlier mentioned. You must first know the Ticker Symbol of the specific company you are looking at. Stocks are basically identified with the help of their respective ticker symbols and are listed on financial newspapers or websites likewise. The stocks that are traded on the most of the US exchange have their ticker abbreviations ranging from one to four letters.

Trading Terms

Now when you are into investing and stocks, you must be well accustomed to certain terms. The next thing you want to know is the Last Trade. It refers to the last value at which that particular stock was sold. The last trade is generally reported 15minutes after the real floor the stock exchange. The Trade Time refers to the time at which the last price or Last Trade was reported. By the term change, we understand the variance in the closing price that was reported last day and the current value of the stock. If the change price is followed with an upward arrow, that means the price has increased by that particular amount and if it is followed by a downward arrow that definitely means that there has been depreciation in the value of the stocks. The term net charge is also used in some quotes. The term Previous close is the last price at which the stock market closed down a day before. And the term Open implies that value at which the stock opened on that particular day you are considering.

The next thing you should know to understand the market data and the stock quotes in the Bid and Ask. This price implies the dealings that are taking place on the stock market on that day. The highest price that the traders are willing to pay for a particular stock is known as the Bid Price. On the other hand, the lowest price that the stock traders are offering as the selling price of a particular stock. The trade will take place only after both the buyer and the seller have reached a mutual decision regarding the price of a particular stock. Another very important term a new investor must be acquainted with is the 1y Est or the 1 Year target estimate. This states the potential price of a particular share one year from that time of calculation. It is usually decided by the market analysts. This helps the investors to understand the potential of a share before investing in it.

The minimum and the maximum price at which a particular stock has been traded in a single day is the Day’s Range for that day. The newspaper quotes state these under the separate headings of “Low” and “High”. Just like the 1y Est is important to develop a better understanding of a particular stock, the 52wk Range too helps the investor to develop some idea about the stock. It is the minimum and maximum price at which the stock in consideration had been traded in the previous year. A wide range in this price implies either heavy profit or heavy loss.

The total shares that got traded on a particular day are termed as volume and the total shares that get traded on an average daily the Avg Vol. This is usually recorded based on the dealings of the past three months. Other important terms include the Market Capitalization which implies the total value of a company in dollars. The Price/Earning or the P/E ratio helps to understand the earning a shock can bring. The EPS is the earnings per share of a particular stock calculated over the previous quarter. And the Dividend and Yield helps the investor know how much dividends the shareholders earned from a particular stock.

To know these well is extremely crucial for new investors so that they can make the right investment choices for themselves.