Learn the general concepts of financial markets and economy. You will see the difference between primary and secondary markets and learn about markets for different products. You will also look at various economic Indicators and their influence on the markets. After completing this course, you will have a much stronger background of financial markets and ready to go to the next stage in the Specialization. This course is designed to help students with very little or no finance background to learn the basics of investments.
4. Understanding financial information : A guide
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Del curso dictado por Indian School of Business
Introduction to Financial Markets
752 calificaciones
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Indian School of Business
752 calificaciones
Curso 1 de 5 en SpecializationFinancial Markets and Investment Strategy
De la lección
Equity Markets
In this module you will be introduced to equity markets and trading in equity markets.
Conoce a los instructores
Vaidya NathanLecturer
Finance
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Learning outcomes.
After watching this video, you will know what stock market tickers are.
You will understand the financial information of
a company as is given in a financial newspaper.
You will understand terms like volume, beta, EPS, etcetera.
Now, that we have covered the basics.
It's time to put this knowledge to work and
actually understand the financial information
that appears in online websites and in financial newspapers.
So, we will basically talk a little bit about, how to look up a ticker symbol.
How to essentially understand the numbers that you actually
get in a financial newspaper, like the Wall Street Journal.
Or if you were to open up, let's say a Google Finance or a Yahoo Finance.
There is a plethora of information that actually comes with each stock.
And we'll actually try to understand those numbers.
So stock exchanges assign each individual stock
a unique ticker symbol for identification purposes.
You usually have to kind of know the ticker symbol
When you're trying to research the stock, or
trying to get quotes on the stock, or if you're placing trade orders.
The term stock ticker refers to, it's a pretty obsolete terminology,
old terminology.
It refers to the now, obsolete telegraph machine.
Which printed really abbreviated,
a company symbols and prices on paper tape.
This was used long, long back.
It used to be used way back in the 1870s to I think 1970s.
By the way, discarded ticker tapes were often used in fact,
thrown out of windows on the Wall Street, as confetti during parades.
And those such events became known as ticker tape parades, by the way.
Today, the old scrolling paper tickers are recalled,
and they've been replaced by electronic display boards, and
display crawls as they're called on financial TV channels and websites.
Stock ticker symbols are usually one to five letters long, and
occasionally contain a period or hyphen to designate a different class of shares.
Some of the oldest and the biggest companies have just one letter or
single-letter stock symbols like say, C for Citicorp,
S for Sprint, F for Ford motors,
T for AT&T, H for Hyatt hotels, and so on.
So some ticker symbols in fact,
some ticker symbols have a way good sense of humor as well.
Like for instance, you have a ticker symbol called LUV,
which is for South West airlines.
And you have a ticker symbol called YUM, which is for actually Yum brands.
Yum brands incidentally, if you haven't heard this name,
owns KFC, owns Taco Bell, owns Pizza Hut.
because all of them are owned by Yum brands.
And the ticker symbol for that is YUM.
If you know the company and their ticker symbol, that you want to buy.
You can obtain its current price and status online.
For instance, if you'd rather type LUV into the text field on say,
the Google Finance page or the Yahoo Finance page.
You'll get something like the picture that showed on the screen for you.
Here, you have some brief explanations, so I'll give you some numbers out there.
And I'll give you some really brief explanation on those numbers.
One of the things that is often cited in these online websites is
what is called as today's open or just the open.
The first price at which the stock gets traded is basically called as the open
price.
This the price when the market opened up this morning.
In the screens for South West airlines, that was $44.76.
Please note that stocks do not
open at the same price that they closed at the day before.
So you also have fields like previous day's close.
This number is the price of the stock for
the last trade of the previous business day.
You also have fields like today's change.
That is basically the change in price which you can see on
the screen is a minus 45 cents or minus 0.45.
You also find the percentage change which in this case is a minus 1.01.
Now that's basically the percentage change compared to yesterday's closing price.
You also have fields like volume,
this indicates the number of shares that have been traded today.
Some stocks may trade millions of shares each day and others only trade a few,
sometimes a few hundreds or even zero shares per day.
If there's no trading that's going on, you have zero shares per day.
There are other fields like last price.
This is the most recent price the stock has been traded at.
You typically would find, on
online trading platforms you would find bid-ask as we described earlier.
Bid is essentially the highest price a buyer is currently willing to pay for
a stock, while the ask is the lowest price at which a seller is
currently willing to sell.
It is also called as the offer.
The size is the number of shares for the bid or the ask price.
You'll also have fields like 52-week high-lows.
This is the highest and the lowest price the stock has stayed at
during the last 52 weeks which is essentially a year, and
that allows you to compare the current price to it's 52-week range.
Also online stock quote listing which includes essentially,
you'll find things like stock charts, which come in a lot of different formats.
They all track up, basically what they track is they track pricing data such as
open, high, low and close which is also called OHLC.
They also come with, usually come with a lot of display options such as
you can display them as line charts, as bar charts, as candle sticks.
You can also select data ranges and
you also have the ability to overlay one information on the other.
Like for instance, you may want to overlay volume on top of moving averages and
dozens of other indicators that you should be available.
Another field that is very commonly seen and is quite noticed and
is noticed with a lot of, is given a lot of attention is the annual dividends.
Dividends are cash payments that some companies make
as a way of returning profits to the shareholders.
If you own enough stocks,
you actually can make a wonderful income just from your stock dividends.
You also have fields like, annual dividend yield.
This is an important measure of the returns of the stock.
And the way it's calculated is,
basically, the annual dividend amount divided by the current stock price.
So for example, if the stock is at $10 and the company pays out a cash dividend of,
say, 50 cents, then the annual dividend yield is 5%.
.50 divided by 10.
On the field that is given a lot of attention is the EPS,
the company's earnings per share.
You can also think of it as profits per share.
It's calculated by dividing the company's most recent annual income
by the number of shares outstanding.
One other field that is usually displayed as what is called as the beta.
It's also written using it's namesake Greek letter, beta.
So beta is essentially a measure of the volatility
of stock compared to the market as a whole.
A beta of one means that it moves with the market.
Greater than one means that the stock fluctuates more quickly in general.
A beta of between zero and one means that the stock moves,
in general, less often than the market.
A negative beta means that the stock generally moves in the opposite
direction to the market.
So these are some of the the feeds that you would actually see when you open
a financial newspaper, or if you were to visit Google Finance or Yahoo Finance.
Or for that matter any of the trading online platforms that are there.
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