Ticker symbol is derived from the now obsolete ticker tape machine.
A stock ticker symbol is a code used to represent a company's stock. When you buy or sell a stock through your broker, you must provide the ticker symbol so that the broker will know which stock you wish to make a transaction on. Stock prices are generally quoted based on their ticker symbols. In addition to the stock ticker, a stock quote has several important components investors need to be familiar with.
Price Quotes
When reading a stock quote page in the financial section of your newspaper, or when looking up a stock quote online, there is a list of abbreviations and numbers provided next to the stock's ticker symbol. One of these is the stock's price quote, which is commonly listed under the title "Last Trade." This price represents the last price at which the stock traded.
Dividends
In addition to the price quote, when you look up a stock symbol, most financial sites and newspapers also list the dividend price, under the title "Div." If the stock doesn't pay dividends, this section of the quote will be blank. If there is a number, it represents the latest dividend amount per share.
52-Week High and Low
Typical stock quotes also provide the stock's 52-week high and low prices. The 52-week high is the highest price the stock traded at over the past 52 weeks. Likewise, the 52-week low represents the lowest price for the same period. This can be useful information for investors. When a stock's current price is near its 52-week high price, for example, it indicates it is strong and may have the potential to reach even higher levels in months to come.
Price to Earnings Ratio
Finally, most price quotes also provide a stock's price-to-earnings ratio under a column entitled P/E. This is a calculation of the stock's earnings per share divided by its current price. A stock with a P/E ratio of 50 has a current price that is 50 times greater than its earnings per share. A stock with such a high P/E ratio may be considered overvalued by some investors. Contrarily, a stock with a P/E ratio of 5 may be considered undervalued by some investors.
