Before online platforms on stocks trading were introduced, clients would place their orders through phone calls. Now, buying and selling stocks are just a few clicks away. Online trading makes it easier for the investing public to change their position at their convenience. Next to opening an account, you need to familiarize yourself on the basics of reading stocks quotes.
Stock quotes show the participants' willingness to buy or sell in a market. Bid and ask are terms usually used and show the price and volume that the public is willing to have. If you are interested on owning a stock, you'll need to place a bid on how much you want to buy it. If you already own a stock and want to sell it, you'll need to place an ask price for how much you want to sell. Every order should have corresponding volumes, the number of shares you are buying/selling. In some trading platforms you can see the number of participants (willing buyers/sellers) that placed an order at a particular price.
The highest buy price and the lowest sell price would be read as the market's quote. For example, the chart below would be "buying at P 2.13 and selling at P 2.15".
Once an order is matched it is removed in the board and the transaction is considered settled. You can also opt to wait and place an order below the best bid price or above the ask price. This will not be matched until someone places an order at your desired price.
Another tool on reading market quotes is a ticker. If you have been in Ayala Triangle in Makati between trading hours you will see a ticker tape in Insular building's electronic board.
A ticker tape is a string of stock information currently being traded real-time. It shows the company and stock symbol, last trade price and volume and percentage of movement for the day. Green indicates that the stocks are up while red tells us the stock is down for the day. Unchanged stocks are usually indicated in blue or yellow.
I admit I did not know any of these when I started investing and I had to learn by myself. These are simple information, but a valuable guide specially for beginners. Well that's about it! I hope you enjoyed today's post. Have fun making money everyone!