Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

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.