[Soft music playing.]
[CIBC logo. CIBC Investor’s Edge. How to read a stock quote.]
>>Narrator: Hello and welcome to Investor's Edge.
[CIBC Investor’s Edge Webpage indicating information for My Accounts. Cursor selecting Quotes and Research at the top right and the screen changing to Market Centre. Market Centre page showing Markets overview and charts of stocks. The cursor selecting My Watch Lists and the screen changing to My Watch Lists screen.]
Today, we're going to take a look at stock quotes. What are they and how do we read them? A stock quote provides a quick snapshot of a company's trading activity on an exchange at that particular moment.
[A green box indicating the information in My Watch Lists. A green box highlighting the Quotes and Research link at the top of the screen.]
Now we will review the components of a stock quote using CIBC as an example from our watch list, which can be found under Quotes and Research.
[A green box highlighting the columns Last and Change.]
We start with Last, which is simply the price at which the last trade took place during market hours. Change shows the difference between the last trade and the previous day's closing price on both a dollar and percentage basis. So, here we can see that CIBC last traded at $144.32, down forty-four cents from the previous day's close or down 0.3 percent.
[A green box highlighting the columns Bid/Lots and Ask/Lots.]
Now we move on to the bid and the ask. The bid reflects the maximum price that an investor is willing to pay for shares of CIBC, while the ask is the minimum price that an investor is willing to sell her shares of CIBC. In this case, the bid is $144.31, and the ask is $144.32 with a spread of one cent. This is commonly referred to as the bid-ask spread. Now, there will always be a bid-ask spread during market trading, because if they are the same, then the trade will have taken place, reflecting in the last price. Then, there would be a reset of the bid-ask prices.
You may be wondering at this time what these lots represent underneath. Well, in order for your order to be posted to the exchange, it must be in the proper format, known as a board lot. A board lot is a standard number of shares that's determined based on two things: the exchange where the security trades and the stock price. Generally, a board lot for stocks priced at a dollar or more is equal to 100 shares.
So here we can see there are 12 board lots or 1,200 shares on the bid, and one board lot or 100 shares on the ask. Now, if you're looking to put in a bid to purchase 150 shares of CIBC at, for example, $144.31, only 100 shares would be posted to the exchange as it meets the board lot criteria. So what happens to the remaining 50 shares in your order? Well, the additional 50 shares represents what we call an odd lot and is sent to a separate order book dedicated to odd lot orders, which is not visible to retail investors and is managed by a market maker.
[A green box highlighting the Volume column.]
Next, we have the Volume, which represents a number of shares traded on that day. Generally speaking, higher volumes indicate more liquidity in the stock and may serve as a technical buy or sell signal for an investor.
[A green box highlighting the Open column.]
The Open is the price at which the security first trades when the market opens at 9:30 Eastern Standard Time.
[A green box highlighting the Day High/Low column.]
The Day High and Low is the highest and lowest intraday prices the stock is trading at during the current session.
[A green box highlighting the 52 Week High/Low column.]
The 52-Week High and Low represents the highest and lowest daily closing prices at which the security traded during the last year.
[A green box highlighting the whole stock quote.]
So, to summarize things, CIBC last traded at $144.32, down forty-four cents on the day; it's currently bidding at $144.31, asking $144.32. I see that there's 1,200 shares on the bid, 100 shares on the ask, with a volume of 630,000 shares traded on the day. The high for the day is $144.49, with a low of $143.44. CIBC opened and first started trading at $144.48, with the 52-week high of $146.05 and a low of $89.42.
So there you have it; you now know how to read a stock quote. Happy trading.
[CIBC logo. CIBC Investor’s Edge.]
[CIBC Investor’s Edge is a division of CIBC Investor Services Inc.]