- the basics
- the share
- trading shares
- Process to buy shares
- Why buy shares?
- How old to buy shares?
- Custodial account
- tax rules on shares
- styles of trading
- buying (going long)
- Shorting (going short)
- Stop losses
- How to choose a share
- Fundamental analysis
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Share features explained
A shares has several features that you should familarise yourself with. The share features are listed and explained below.
The last price the share was traded at.
The price at which you can sell your stock.
The price at which you can buy your stock.
Note: There is always a small difference between the bid and the ask price, this is where the market makers make their money.
52 week high
The highest price the share reached over the last 52 weeks.
52 week low
The lowest price the share reached over the last 52 weeks.
Stock ticker symbol
The ticker symbol is the shortened name for a company. It is the 1-4 letter symbol next to the name of the share.
MSFT = Microsoft
VOD = Vodafone
The ticker symbol is often required when searching for a share. Ticker symbols are especially useful online when entering shares quickly into a watchlist or portfolio.
The volume of a share refers to how many times the share has been traded in the day.
Average Daily Volume
Average daily volume is normally calculated over a 90 day period.
If a stock has an average volume of 5 million it means, on average, 5 million shares are traded each day.
The higher the average daily volume the more liquid the stock is. This means the share is more stable as more people are willing to buy or sell the share when you need to get rid of it.
Note: Low volume should be avoided when acquiring a share as it can result in liquidity problems. This is because when you come to get rid of the share and no one on the other end wants to acquire it then the price can easily drop 0.5-2%, if not more, before you can get rid of it.
The market capitalisation refers to the value of the company in terms of issued share capital. The formula for working out market capitalisation is (share price x no of shares in issue).
Companies with huge market capitalisation can directly influence the direction of the stock market, especially in the UK where there are less companies and where the bigger companies take up a large % of of the overall market capitalisation.
The market capitalisation of a company determines whether they make it into certain indices i.e. FTSE 100.
Generally speaking, the smaller the market capitalisation of a share, the less liquid the share is.
Note: To get the hang of the concept of shares I recommend opening up a free practice account, you can trade shares with ‘virtual’ money which means you don’t lose a penny and by practice trading you learn how much money you can make and lose pretty quickly (plus its great fun buying and selling shares for the first time!!).
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Stock market basics
Stock charts explained
Stock dividends explained
Stock Split Explained
Why do shares move up and down?
How do I read a stock quote?
Understanding company financial statements
Rights issue of shares
The process of buying shares
Why buy shares
Age limit for trading shares
Tax rules on shares
Styles of trading
Buying (going long)
Shorting stock (going short)
Stop losses explained
Stock market explained
What market to buy shares
Factors that affect the stock market
When does the stock market open?
Stock market trading guide
Step by step guide to trading shares
5 golden rules when trading shares
The risk:reward ratio
Stock market games
Stock market 60
Stock market suicide
Advanced stock market trading
IPO (Initial Public Offering)
Exchange traded funds (ETF's)
Hi, if a Market Cap is 5,464.58 million.
Is that five thousand, four hundred and sixty four million? What is the .58?
The 0.58 is 0.58 of one million, or 58% of one million, so it is 580 thousand. Thus, this is actually a market cap of 5 billion, 464 million, 580 thousand.