How to Read a Stock Quote
Bid, ask, volume, market cap, P/E. Every quote screen uses the same dozen fields. Here is what each one tells you, with a worked example.
Key takeaways
- The bid is what buyers will pay, the ask is what sellers want. The gap is a hidden trading cost.
- Market cap = share price × shares outstanding. It tells you how big the company is.
- P/E = price ÷ earnings per share. It tells you how much investors pay for each dollar of profit.
- Use limit orders when the spread is wide or trading is thin.
A sample quote
The company below is made up to illustrate the fields. It is not a recommendation.
| Example Corp (EXMP) | Value |
|---|---|
| Last price | $84.20 |
| Change | +$1.15 (+1.38%) |
| Bid × size | $84.19 × 300 |
| Ask × size | $84.21 × 500 |
| Volume / avg. volume | 3.2M / 2.7M |
| Day's range | $82.90 – $84.75 |
| 52-week range | $61.40 – $91.10 |
| Market cap | $42.1B |
| EPS (trailing 12 months) | $4.21 |
| P/E (TTM) | 20.0 |
| Dividend / yield | $1.68 / 2.00% |
| Beta | 1.10 |
Price fields
Last price is the price of the most recent trade. Change compares it with the previous day's closing price. On free websites, quotes may be delayed by 15 minutes or more, so check the timestamp.
Bid is the highest price someone is currently willing to pay, and ask is the lowest price someone is willing to sell at. The number after the × is how many shares are offered at that price. A market order to buy fills near the ask, and a market order to sell fills near the bid. The difference, here $0.02, is the spread. Large, popular stocks have tiny spreads. Small or thinly traded stocks can have wide ones, and that is where a limit order, which sets the most you will pay or the least you will accept, protects you.
Activity fields
Volume is how many shares traded today. Comparing it with average volume shows whether something unusual is going on, such as earnings news. The day's range and 52-week range show the low and high over each period. A price near the 52-week high is not automatically expensive; it only tells you where the stock has been.
Size and valuation
Market capitalization is the share price times the number of shares outstanding. EXMP has about 500 million shares, so 500M × $84.20 ≈ $42.1 billion. As a rough rule, companies above $10 billion are called large caps, $2 to $10 billion mid caps, and below that small caps.
EPS, earnings per share, is the company's net profit divided by its shares. P/E is price divided by EPS: $84.20 ÷ $4.21 = 20. Investors are paying $20 for every $1 of yearly profit. P/E is only useful in comparison, with the company's own history or with similar companies, since fast-growing businesses usually carry higher ratios.
Income and risk
Dividend yield is the yearly dividend divided by the price: $1.68 ÷ $84.20 = 2.0%. If the price falls, the yield rises even though the payment did not change, so a very high yield can signal trouble.
Beta measures how much a stock has tended to move relative to the overall market. A beta of 1.10 means it has historically moved about 10% more than the S&P 500 in either direction. It describes the past, not the future.
This article is general education, not personalized financial advice. Read our editorial policy and disclaimer.
