Price Change
What It Is:
In the stock market, a price change is the difference in trading prices from one period to the next or the difference between the daily opening and closing prices of a share of stock.
How It Works/Example:
For example, let's say Company XYZ shares opened at $25 this morning and closed at $24.
The price change is -$1, or -$1/$25 = -4%.
Why It Matters:
Price changes are a core component of financial analysis, and predicting price changes can be as, if not more, important than an actual price change.
It is important to remember, however, that percent-based price changes are useful only in the context of the number of dollars involved.
A 75% change in the price of a box of cereal, for example, may only involve a few dollars while a 75% change in the price of Berkshire Hathaway may involve thousands of dollars.
Facebook Comments:
Cached on May 24, 2012, 10:50 am