Reading Stock Quotes

A quote is a snapshot of what a stock is trading at and what it would cost you right now. Most of the fields are self-explanatory; two of them decide whether the trade makes sense.

Bid and Ask

The bid is the highest price anyone is currently willing to pay. The ask (or offer) is the lowest price anyone is currently willing to sell at. You sell into the bid and buy at the ask — never the other way round, which is why the two numbers are not interchangeable.

The gap between them is the spread, and it is an immediate cost you pay on entry. On a large-cap it is a cent or less. On a sub-$1 stock it can be 10–30% of the price, which means the position is underwater the moment it fills.

Last, Change and Volume

Last is the price of the most recent completed trade. It is history, not an offer — on an illiquid stock the last trade may have been hours ago and bear no relation to what you can transact at now. Change is measured against the previous session’s close.

Volume is shares traded today, and it is the field that tells you whether any of the others mean anything. A 40% gain on 8,000 shares is one person’s order, not a move. Convert it to dollar volume — price multiplied by shares — because that is what determines whether you could actually get out. Our most active scan ranks on exactly that, for exactly this reason.

What to Watch For

• You buy at the ask and sell at the bid. The gap between them is an immediate cost.
• Last price is history — on an illiquid stock it may be hours stale.
• Convert volume to dollar volume; that is what tells you if you can get out.
• A large percentage move on tiny volume is one order, not a trend.

Scans That Use This

• Most active penny stocks
• Today's penny stock gainers

Stock Trading

• Stock Market Order Types
• Reading Stock Quotes
• Level II Quotes
• Market Makers

All stock trading tutorials