How To Read a Stock Market Ticker

Everyone has at least a passing interest in the way the stock market works. That interest may be little more than a desire to know what "all those crazy letters and numbers" on a stock market ticker are.

If you want to become a serious investor, being able to read the daily stock tally is the most basic piece of knowledge you'll need to start. And if you are a detached observer wanting to know a little about the stock market, you'll need the same skill. It really isn't as arcane and esoteric as it seems. Let me explain.

There are five pieces of information you will read when looking at a stock market ticker. These will read left to right: the stock symbol, the shares traded, the prices traded, the change of direction and the amount changed.

The Stock Symbols

Stock symbols are a shorthand way to identify all the companies being traded on the stock market. New York Stock Exchange symbols are 1 to 3 characters long. These symbols are something like the old heraldic symbols in England; you can choose your own, but you can't choose one that's already being used.

There are several means which companies use to choose these symbols. Exxon used to use the letters XON, which were a phonetic spelling of their name. Anheiser Busch references its most popular product, BUD, with its stock symbols.

The Stock Numbers

This is the number of shares traded. This number is abbreviated for the sake of brevity. "K" stands for thousand; "M" stands for million; "B" stands for billion. So if you see 10K, this means that 10,000 shares of the stock have been traded.

The Prices Traded

The second number is the last bid price. So if this is showing 75.80%, the last bid was at $75.80 per share.

The Change of Direction

This comes in the form of a triangle or arrow head pointing either up or down. This simply shows where the stock price is trending. If the last bid price was lower than the previous bid price on that stock, the arrow will point down. If the last bid price was higher than the previous bid price, the arrow will point up.

You may occasionally see in the media the change of direction indicated by plus or minus symbols. In this case, plus equates to up and minus equates to down.

The Amount Changed

This simply shows how much the price changed since the last change. If you put together the amount changed with the change of direction arrow, it tells you where the stock price is going. Often on television tickers, you will see only the stock market ticker shortened to include only the stock symbols, the prices traded and the change of direction. In this case, you will see a plus or minus symbol to reprsent the change of direction.

Colors on Television

Television networks often add extra information in their own form of shorthand. This is accomplished with the use of color coding. The colors of the stock market ticket symbols indicate something about the trading trends.

Blue or white letters/numbers indicate that the price hasn't changed from the closing price of yesterday.

Green letters indicate that the price has risen since yesterday's close.

Red letters indicate that the price has fallen since yesterday's close.

A Note About the Ticker

The term "ticker" is a reference to earlier days in the history of the stock market. In the late 19th and early 20th century, ticker machines would print out the day's stock changes. These were called ticker machines because they made a distinctive ticking sound when printing out the numbers.