The basic numbers on a quote screen
The first thing a quote screen shows is four points in the day. The open is the first traded price when the market opens, the high is the highest, the low is the lowest, and the close is the price fixed at the end of the session. The change is the move from yesterday's close, and the percentage change is the same thing as a ratio. Volume is the number of shares traded; turnover is the money value traded, which is the fairer way to compare stocks with very different prices.
- Open, high, low, close: four points in the day
- Change and percent change: versus yesterday's close
- Volume: number of shares traded
- Turnover: value of shares traded
Numbers that describe company size
Market capitalisation is the share price multiplied by the number of shares issued: the market's price tag for the whole company. A high share price does not make a company big; you need to multiply by the share count to compare size. Par value is a nominal amount set when the shares were first issued and has almost nothing to do with today's price. Free float is the part of listed shares left after removing stakes that rarely trade, such as those held by controlling shareholders.
Price limits and market safeguards
Korean stocks can only move within a set range each day, and hitting the top or bottom of that range is called limit up or limit down. If the whole market plunges, a circuit breaker halts all trading for a while; if futures prices swing sharply, a sidecar briefly delays program trading orders. When a single stock moves sharply in a short time, a volatility interruption switches it to a single-price auction for a short spell. Check the exchange's official guidance for trigger levels and durations.
Words about your account and money
Your cash balance is the money sitting in the account. Proceeds from a sale cannot be withdrawn until settlement completes, so screens often show today's balance and the balance two days out separately. Margin is money set aside when you place an order; paying only that and covering the rest by settlement day is buying on an unsettled basis. If you fail to cover it in time, the broker sells shares for you. Buying with money borrowed from the broker is called a margin loan.
- Cash balance: money in the account
- Margin: money held when you place an order
- Shortfall: the amount due by settlement day
- Forced sale: what happens if the shortfall is not covered
- Margin loan: buying with money borrowed from the broker
Events that change the share count
A stock split divides each share into several, so the share count rises and the price falls in proportion, while the company's value and the value of your stake stay the same. Combining several shares into one is a reverse split. A rights offering issues new shares for cash, which can dilute existing shareholders. A bonus issue hands out shares for free and in principle does not increase the company's value. Around these events, prices are adjusted on the ex-rights date.
Kinds of shares
Common shares are ordinary shares with voting rights at shareholder meetings. Preferred shares usually have no or limited voting rights in exchange for receiving dividends first or receiving more, and the terms vary by company. A company's common and preferred shares trade separately with their own prices and volumes, and preferred shares can swing sharply because they trade less. The dates that decide who receives a dividend are covered in the article on where dividends come from.
Ratio abbreviations you will see
PER is the share price divided by earnings per share, showing how many times earnings the stock trades at. PBR divides the price by book value per share, and ROE shows how much profit the company earned on its equity. EPS is earnings per share itself. Typical levels differ by industry, so comparing these figures across industries easily misleads. For how they are calculated and read, see the articles on reading the three financial statements and on how fair value estimates are made.
Filings and warning labels
A filing is a company's formal notice of information that could affect investment decisions, and anyone can read it on the electronic disclosure system. Earnings, share issues and changes of controlling shareholder appear there. Labels next to a stock name, such as administrative issue, investment caution, warning or risk, and trading halt, are the exchange's way of flagging risk. Knowing the terms is only a starting point for judgement, and this article is not investment advice.
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