I still remember that during my childhood days when my father used to watch news channels I wondered, why some colorful numbers with arrows and symbols are moving at the bottom of my tv screen endlessly. Not only this, these numbers kept on changing.
I used to ask my father why do you bother watching these numbers? Why are they being displayed? He used to say that ‘ It’s all about the market son, you are still a kid to understand such stuff’
This made me more curious about the stock market.
You all have seen those numbers in red and green color flashing on your screen with some symbols and arrows.
Does that really make any sense.?
In my initial days of learning, I used to look at screens with these flashing numbers, with arrows and symbols and I used to wonder how technical it feels to look those and analyze the market trend.
In my case, I only used to see those numbers but never analyzed them until I learned the technique.
If you can understand those numbers you will realize that it displays a huge amount of information for the traders.
Let me take you to the depth of this ticker tape and aid you understand and interpret those numbers just as professional investors do.
Ticker tape represents a list of securities to their last traded price that may be real-time or delayed. The list actually comprises of most actively traded securities.
If you look at Ticker tape that scrolls information, following inference you can take
- Current price
- Change in price from the previous transaction
- Trend of stock ie upwards or downwards
- Change in price from the last transaction
A typical ticker tape looks like this
AAPL 5k @138.68USD 0.32 (0.23%)
You need to start reading from left starting from ticker symbol
|AAPL– Apple Inc.||Company name represented in ticker symbol|
|5K||Number of shares traded|
|@||At noted price|
|138.68 usd||Price per share, last traded price|
|Trend direction compared to last traded price|
|0.32||Change in price from last traded price.|
Have you ever thought that such a small set of numbers and symbols flashing in your screens can scroll down so much of information? No need to check your stocks separately. You can look up here and even say how the market is behaving on that particular day.
Isn’t it amazing? but wait it does not end up here.
Have you noticed In the above example that I have used a red color, each color has its own relevance with the information
- Green represents the stock is trading higher than the previous day’s close.
- Red represents the stock is trading lower than the previous day’s close.
- Blue or white shows the stock is unchanged from the previous closing price.
But then one question remains unanswered
There are thousand of stocks traded every day. How are the securities selected to display on ticker tape?
Why not all securities get displayed on ticker tape?
Got puzzled? If this is the case then how ticker tape is useful?
Here is the answer
Securities listed on ticker tape to scroll through depend on many factors, and these factors decide the priority of any security to get displayed.
- Change in price
- Volume traded
- Any significant news circulating around the company
- How widely the security is held etc..
Anyways it is helpful to know the market trend but you should not totally rely on ticker tape for your decisions. Though it provides market insights and sentiments, it helps only to keep you informed and updated.
So next time when you watch news channels and see ticker tape scrolling information, I hope you will not feel it as useless information and even spread its significance to your friends who yet need to grow up to understand this.
But remember this ticker tape only shows current activities of the market, keep yourself updated using this and don’t rely on information from ticker tape only.