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How stock quotes can better inform your investing decisions


Information included in a stock quote is used by investors and other market participants to evaluate stocks and negotiate buying and selling prices.

A stock quote is the price of a particular stock that’s listed on an exchange.
Stock quotes also provide the stock’s low and high prices and the opening price for the day.
The information shown on a stock quote will vary based on the platform or service you’re using.

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There’s a lot to know about a stock before buying it. How has it been performing? And is the company doing well? Luckily, stock quotes can provide a lot of knowledge that tells investors the current price of a stock – including a wealth of additional information.

Here, we’ll break down what a stock quote is and how to read one.

What is a stock quote?

A stock quote shows the price of a specific stock on an exchange, along with information about the stock. This information can include the number of shares traded that day, its previous closing price, most recent opening price, and much more. The information shown on a stock quote can also vary based on where you’re looking.

“A stock quote is a real-time quote of what the overall market is willing to pay for that instrument at that very moment. Because stock quotes fluctuate every millisecond, the real-time aspect is extremely timely,” says Nick Nazarov, Managing Partner of Benchmarq Trading Technologies.

Understanding how stock quotes work

The quote price – which is the most recent trading price of a stock – is based on negotiations between buyers and sellers. A buyer lists a bid price, which is the highest price they’re willing to pay for the stock. Then the seller lists an ask price: the lowest price they will accept for the stock.

The difference between the bid and ask price of a stock is known as the bid-ask spread. The lower the spread, the more liquid the stock is, meaning the more demand there will be for that stock. Conversely, the higher the spread, the less demand. The stock quote lists the last price the stock actually traded for.

Quick tip: The bid-ask spread is paid by the buyer if they end up paying the asking price. If they end up selling at the bid price, then the seller will pay. The market-maker (individual or firm that facilitates the trade) earns the spread.

Information included in a stock quote is used by investors and other market participants to evaluate stocks and negotiate buying and selling prices. Stock quotes today are accessed online in real time – for a fee – or delayed by about 15 minutes, typically at no charge.

“Stock quotes are not an investment strategy in and of itself,” says Nazarov. “They’re useful instruments in your investment toolbox to get an instant ‘temperature check’ of what the market is valuing that stock now.”

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Source:: Business Insider

      

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