If you’ve ever watched a financial news program or visited a website that covers the stock market, you might notice an endlessly cycling parade of numbers, symbols and abbreviations. These collectively make up a stock ticker, which provides snapshots of activity in the stock market. Knowing how to read and understand a stock ticker is crucial to following the movements of the market.
Consider working with a financial advisor as you build your expertise in stock investing.
What Is a Stock Ticker?
A stock ticker shows price changes for stocks throughout the day. They list the company’s symbol, the number of shares at the trading price and if the price has gone up and down since the market closed the day before.
Once a stock ticker was an actual physical item, a piece of paper spit out by a machine with an update on stock activity. Paper stock tickers long ago vanished in favor of electronic, real-time updates that can be read on TVs, computers and mobile phone apps. (Ticker-tape parades are so named because they originally used paper ticker tape; now they use confetti or shredded paper.)
Just like the original paper version, today’s stock ticker is a snapshot of how different stocks are performing at a given moment. It can be useful whether you own shares of the stock or you’re curious about the performance of a market index (like, say, the S&P 500). In any case, the ticker snapshot will tell you the volume that stock is trading at, whether the price is up or down from the day before and by how much.
Bear in mind that any particular ticker you examine has a short shelf life. The information will certainly change by the next time that stock’s performance is highlighted. The ticker is a quick dispatch that tells you the current price of the stock or index; whether that price is up or down; and how much volatility it’s currently experiencing.
What the Stock Ticker Tells You
A stock ticker might look something like the following example:
GOOG 12.4M 1665 ^ 12.50
- A ticker symbol (GOOG): These are few characters that identify a company on the stock exchange. A three-letter symbol means the stock trades on the New York Stock Exchange. Four letters means it probably trades on NASDAQ. Some well-known companies may have a single character ID (AT&T shows up on tickers as ‘T’). If there is an ‘F’ or ‘Y’ at the symbol’s end, it usually means the stock is foreign. In this case, the ticker symbol GOOG refers to Alphabet, Inc., the parent company of Google.
- Number of shares traded (12.4M): This is the volume for the trade being quoted. It’s how many stock shares are being traded that day. The volume amount is abbreviated: “K” is shorthand for thousand, “M” is for million and “B” is for billion.
- Trading price (1665): This is also known as the trade value. It refers to the price per share or the last bid price. Like the share volume, this can change rapidly and may fluctuate throughout the trading day.
- Change direction (^): This indicates if a stock is trading higher or lower than when the market closed the previous day.
- Change amount (12.50): This details how much the price of a stock changed since market closing the day before. It includes both dollars and cents.
In addition to showing the change amount in dollars and cents, a stock ticker might also show by what percentage the price has changed. This important, because a price change of, say, $10 is much more significant for a stock trading at $50 than for one trading at $500.
Aside from the letters and numbers on the screen, you’ll also want to pay attention to color. It can instantly tell you whether the change for a particular stock is higher or lower.
- Green: the stock is trading higher than when it closed the previous day.
- Red: the stock is trading lower than when the market closed the day before.
- Blue or white: unchanged from the previous day’s market closing.
Are all Stocks Listed on the Stock Ticker?
Not by a long shot. Shares in tens of thousands of companies worldwide are traded every day. There aren’t enough news channels and apps to load updates on them all to stock tickers and it also isn’t necessary. Most stocks don’t experience much volatility and most interest a fairly select group of investors. As such, a stock ticker will generally include a few key exchanges; some of the most popular companies; and ones that have seen unusual activity that day.
If you’d like to see the ticker symbol and information for a particular stock that isn’t big or volatile enough to show up on the day’s ticker, many financial news websites will allow you to look it up to see live data.
Where to Find a Stock Ticker
There are many sites that provide stock tickers these days, most of them in the financial news space. NASDAQ and the New York Stock Exchange’s websites feature regular updates of their own index and major stocks, with interfaces that are easy to use. You can also find stock tickers on many major cable news networks.
Depending on how you invest, you might be able to track your investments straight from your phone with built-in or downloadable stocks apps providing customizeable stock tickers.
With a little practice, deciphering stock tickers will be as automatic reading the weather report. They use a handy shorthand that can help you get comfortable with the language and focus of stock indexes. If you are eager to learn more about how the markets work, stock tickers become a good jump-off point.
Tips for Investing
- Now that you know what a stock ticker does, it might be prime time to invest in some stocks. Investing in any form is considered risky, and stocks tend to be the riskiest. Use our asset allocation calculator to figure out a portfolio that matches your risk tolerance.
- Don’t want to spend all day watching stock tickers and picking stocks? It may be a good idea to work with a financial advisor who can manage and monitor your investments for you. If you don’t have a financial advisor yet, finding one doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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