As markets globalise and the investing population continues to grow, financial websites and television stations are blossoming, streaming real time market data into our computers, mobile devices and televisions. In this first part of a two column series we will look at the data provided by the various media and the relevance it has to investors.
Two of the most widely known business and financial networks are CNBC TV and Bloomberg Television. A viewer will be inundated with data visible from the top to the bottom of the screen. For newcomers, it may be difficult to interpret the meaning of data given the abbreviations, symbols, charts and graphs.
Typically on the bottom of the screen the viewer is provided with real time stock market trading data, for high volume traded stocks, if that particular market is open, or closing stock prices for selective stocks if that market is closed.
A stock is represented by a stock symbol, also known as a ticker symbol.
A stock symbol is a unique identifier for each publicly traded share on a particular stock market. When a company is preparing to offer shares to the public, it would normally apply to the exchange in which it will trade and request a symbol of its preference in advance. Symbols can be numbers or letters or a mix of both, depending on the rules of the exchange. In the United States the exchanges permit letter-only symbols with a maximum of 5 letters.
Symbols are typically an abbreviation or may reflect another meaning such as the company’s product. General Motors, the country’s largest automaker is simply GM, while Harley-Davidson trades under the symbol HOG, a common nickname for its motorcycles and an acronym for its owners club.
So what does it mean when “General Motors (GM) 20K @ 31 ^ 0.50’ flashes across the tape on the bottom of your television screen. In this case, 20,000 shares of General Motors traded at a bid price of 31.00, and the stock is up 50 cents for the day. Not all media display the name and symbol of the stock so avid stock watchers build a mental database of ticker symbol translations.
There may be more than one band displayed which may show information from different exchanges and market summary information such as up and down volume and numbers of advancing and declining stocks.
Stock index, currency and commodity information is also displayed. A stock market index is a number that measures a compilation of stocks to track a particular market, region, or sector.
Among the most notable indexes are the Dow Jones Industrial Average and the S&P 500 (SPX) of the United States, the FTSE 100 in the United Kingdom and the Nikkei 225 in Japan.
As the stocks in the group change value, so does the index.
Some indexes are viewed as the benchmark for the national market. Various indexes and their price movements are actively displayed.
Next week we will examine the internet profiles of stocks and indexes and the relevance of the various available data supplied.
Anthony Galliano is Chief Executive Officer at Cambodian Investment Management.