What is a stock quote?
When the price of a stock is quoted on an exchange, it's known as a stock quote. When it comes to researching investments, a stock quote is invaluable as it can contain key information such as the bid and ask price, volume traded and last traded price. It serves as an indicator of the market price for a security at that very moment.
As the price of some stocks can fluctuate multiple times every second, the real-time aspect is quite significant. This information can dictate return-on-investment decisions like purchase price and more. To access stock quotes in real-time, an investor may need to pay a subscription fee to a portal, however, delayed stock quotes are often available free of cost. Several portals also allow investors to create watchlists that make it easy to save a list of quotes that they can revisit often.
How to read a stock quote
Stock quotes generally consist of many data points. These data points remain the same for many exchange-traded securities such as stocks and Exchange Traded Funds (ETFs). For investors, understanding these key data points can be critical. The different components of a stock quote can provide deep insight into a company.
Security name: This is the name of the company or organization offering the stock.
Ticker symbol: This is a series of unique letters or numbers assigned to the stock which are used to identify it.
Bid: This indicates the highest price a buyer is willing to pay for one share of the stock.
Ask: This indicates the lowest price a seller is currently willing to accept in exchange for one share of the stock.
Volume: This is the total number of shares of the stock that have traded hands on a given day. While some stocks may trade thousands or millions of shares a day, others may only trade a few hundred shares or less.
Bid-ask spread: This is the difference between a stock's bid and ask price. The lower the spread, the higher the demand and the more liquid it is. Conversely, the higher the spread, the lesser the demand.
Lot: This is the total number of shares that are available for trading at both the ask and the bid price. The standard lot size is 100 shares, but they can be traded in any number of shares.
Last trade price: This is the price at which the last trade was executed. Investors often compare the last trade price to the closing price from the previous session.
Open: The first trade price that is recorded during the day’s trading is known as the opening price. To help quantify the stock's movement, it is generally used in relation to the current price or the closing price.
Close: The price from the previous trading session when the market is closed is known as the closing price.
Pre or post market trading can also impact this. If there is a sharp change between the last traded price and its open, it could suggest that the stock is experiencing strong momentum.
Daily high-low price range: This can be calculated by looking at the day's highest trade price and lowest trade price which can be found within a stock quote. This range is used as a measure of volatility.
52-week high-low price range: This is the range of a stock's high and low prices over the course of the previous 52 weeks. This gives investors some perspective over an extended period of time.
Market Capitalization (Market Cap): This is the total market value of a company's outstanding shares. It is calculated by multiplying the number of shares outstanding by the current market price of one share. Market Cap represents a company's worth as determined by the stock market.
Price-Earnings Ratio (P/E): The P/E ratio is an integral part of a stock's financial statement. It is a ratio used to help value a company and measures its current share price relative to its annual per-share earnings.
All the above data points can prove to be very helpful when researching the company. However, it's important to note that the supply and demand can also affect the price of a stock. The price can rise as more investors try to acquire shares. On the other hand, as more sellers enter the market, the increased supply of shares can drive prices lower.
Where to find stock quotes
There was a time when stock quotes were quite hard to find. However, that is no longer the case. There are now many ways to obtain stock quotes, including a number of online brokerages and apps that provide real-time stock quotes for free.
Accessing stock quotes in WebBroker
TD Direct Investing provides both real-time and historical quote data for customers through its online investing platform – WebBroker. It allows investors to do more than just obtain a quote. Investors can also access news, reports and charts as well as place trades.
Once logged in to WebBroker, simply enter the ticker symbol or the name of an equity into the search box on the page. This will take you to the quote page of the stock.
On a final note
By providing access to a variety of data points, stock quotes can help investors in the research phase. Being able to read and analyze a stock quote can help an investor make better-informed investing decisions. Stock quotes are also helpful when it comes to comparing companies within the same sector.
The information contained herein has been provided by TD Direct Investing and is for information purposes only. The information has been drawn from sources believed to be reliable. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual's objectives and risk tolerance.
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