How to Read a Stock Quote
A stock quote is a snapshot of the market right now. Understanding it helps you avoid bad fills, compare liquidity, and interpret price moves.
The Core Fields
Last Price
The most recent traded price. This updates every time a trade happens.
Bid and Ask
- Bid: The highest price buyers are currently willing to pay.
- Ask: The lowest price sellers are currently willing to accept.
If you place a market buy, you typically fill near the ask. A market sell fills near the bid.
Spread
The spread is the difference between ask and bid. Spreads tend to be:
- Tight on liquid, heavily traded stocks
- Wide on illiquid stocks or during volatile moments
Wide spreads can be an invisible cost (you 'pay' the spread when you enter and exit).
Volume
Shares traded today. Higher volume often means better liquidity and tighter spreads.
Market Cap
Market cap = price × shares outstanding. It’s a rough size measure, not a measure of value.
A Simple Execution Tip
When spreads are wide or volatility is high, prefer limit orders to control your price.
Common Mistakes
- Assuming the last price is what you'll get on a market order
- Ignoring spread on small or volatile stocks
- Treating market cap as “how much money is in the company”
Summary
Bid/ask tell you where the next trade is likely to happen. Spread and volume tell you what execution might cost.