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How to read the stock ticker
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August 7, 1996: 3:17 p.m. ET
Reading a tape can be confusing, but useful in spotting trends
From Contributing Editor William Rukeyser
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NEW YORK (CNNfn) -- To a financial novice, the characters flowing along a stock market ticker might as well be Greek.
But that string of data that circles buildings and brokers' offices, and dances along the bottom of our television screens speaks volumes.
"Reading the tape" remains a mystical art, but the chances to practice it are increasing. There is the big ticker in New York's Times Square, but now cable viewers can stare at on-screen ticker tapes on CNNfn and other channels.
But what should they be looking for? And what's the point?
David Braverman, an investment officer at Standard & Poor's, offered a simple translation.
"Basically, there are three pieces of information that you see on the ticker. One is the ticker symbol, which tells you which stock you're actually dealing with in the transaction."
Braverman continued, "The second piece is the volume, (which tells you) how many shares were actually part of this trade. The third part is the price at which the trade was transacted."
Along with the price, the ticker also shows how the price has changed since the last trade.
And to complicate things further, some displays abbreviate by dropping the first digit from the price -- so, "5" may mean "35" -- and by dropping the last two zeroes from the number of shares traded -- so, "50" means "5,000."
The more details listed, the faster the tape has to stream by to keep up with trading.
Active traders say they get a feel for trends from the numbers on the ticker, according to Stan Weinstein, publisher of The Professional Tape Reader.
"I always liken it to a doctor -- you learn to look at healthy cardiograms and unhealthy cardiograms. We want to buy the healthy cardiograms."
But stocks are not hearts, and even the pros caution against staring too hard at the tape.
"Even I, a professional tape watcher, (have to remember) the old cliche: the forest for the trees. You're looking at very little twigs out here, and you can get very thrown off," said Weinstein.
So glance with care. We don't want to lose you.
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