How Stocks Are Priced

Many people are still confused about the pricing of stocks and the movements of prices when they read through the list of stock prices in the newspapers. There is a wide variety of stock prices and there are many people who kept on wondering why some well-known companies are being traded for relatively low prices while some lesser known companies are being traded for excessively high prices.

Stock prices, to a certain extent, are determined by the confidence of an investor that is based on either a real or a perceived performance. The financial status of companies are reported on a quarterly basis when their cash flow, sales, and earnings are disclosed. The worth of a company is based on its financial status but it can be overrode or undermined by the speculation of the investors.

Rumors spreading in the stock market usually affects the fate of the stocks. For example, an ongoing rumor stating that a particular company is planning to make a strategic move will cause investors to come flocking just to buy stocks from that company. The principle of supply and demand applies in the stock market. A sudden upsurge in the interest of investors will cause the stock prices to rise while a fear among investors will cause the prices to plummet. The worth and the performance of a company are still considered to be the biggest factors in the determination of stock prices.

Stock prices can be found in the daily market summaries of newspapers or online sources. They provide information about the current prices and market movements around the clock. Stock brokers also provide quotes which can be accessed either via the Internet or via a telephone.

A stock quote table, which can be found in a newspaper or an Internet website, contains useful information that can help investors to make their decisions regarding the buying or selling of stocks. Reading a stock table requires a necessary skill for anyone who is interested in the activities of the stock market.

Latest Change 52 Weeks
symbol price net % time high low volume high low
BCE 31.150 -0.480 -1.52 16:57 31.750 31.110 3,643,000 33.000 27.150
BGM 17.060 -0.280 -1.61 15:54 17.300 17.040 207,400 26.850 17.110
IBM 79.820 -0.290 -0.36 16:01 80.680 79.560 4,999,200 99.100 71.850
MSFT 24.670 -0.310 -1.24 16:00 25.050 24.670 73,696,700 27.940 23.820

The first column of the stock quote table contains a 3 or 4-character long ticker symbol that indicates the name of the company. For example, BCE stands for Bell Canada Enterprises while MSFT stands for Microsoft. The list of ticker symbols can be searched through the Internet.

The latest price indicates the current price at the time the table was published. The latest price in the tables found in newspapers describe the closing price for the day. The prices in the Internet, however, are updated every few minutes.

Change is the difference between the previous day closing price and the current stock quote. High indicates the highest price while Low indicates the lowest price of the stocks sold as of the last trading day. Volume describes the number of shares that have been traded for the day. The 52-week High and Low shows the highest and lowest prices in the previous year.

Some tables contain additional columns to make room for other information such as the Bid Price, which is the price a buyer is willing to pay; the Ask Price, which is the price a seller is willing to sell; the Price/Earnings Ratio, which is the stock price divided by the earnings per share; the Market Cap, which is the outstanding shares multiplied by the current market price; and the Dividends Per Share, which is the current annual dividend that the company pays.

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