[David Waring]

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In our last lesson we began a new module on how to place stock trades, with a look at how to set up a demo stock trading platform, with Thinkor Swim. In today's lesson we are going to continue this discussion, by learning how to read stock quotes.

For anyone who missed our lesson on setting up a demo account, I recommend pausing this video and clicking the link above this video to register for a free ThinkorSwim demo, so you can follow along as we go through this lesson. For everyone else, go ahead and click the icon to launch the ThinkorSwim platform, and enter your username and password to launch.

Once you have logged into the platform you should see the trade page of the platform which will be blank. One of the reasons why I have chosen to work with the ThinkorSwim platform is because you can trade pretty much any market you would like. While this is a positive that allows you access to many advanced features as you become a more experienced trader, this also means that there are lots of things on the platform that are not relevant to us at this stage of the game. With this in mind, I recommend simply focusing on learning the areas that we cover in these lessons, and leaving the other parts of the platform to be explored at a later time.

Now that we have this out of the way, we can go ahead and pull our first stock quote. Stocks are represented by something which is known as a ticker symbol, which is an abbreviation (normally from 1 to 4 letters) which represents the name of the company that you wish to trade. The first thing that we will need to know in order to pull up a stock quote is what the ticker symbol is for the stock that we wish to view. Luckily, the ThinkorSwim platform has the ability to lookup a stock's ticker symbol, built right into the platform.

To get to the ticker symbol lookup feature, click the two blue down arrows beside the symbol window, in the upper left hand corner of the trade tab. This will bring up a dropdown menu where you can select the "Lookup" tab. Once you have selected the stock quote lookup tab, it should display a blank box, where you can type in the name of the company that you wish to view a stock quote for. In this example we will look at a stock quote for Microsoft. After typing the word Microsoft into the symbol lookup window, you should see it come up in the dropdown list below with its ticker symbol MSFT, which you can click. After clicking on the ticker symbol the trade tab will automatically populate with the quote information for Microsoft.

What you will see here going across the screen from left to right is:

The Last Column: This is the price of the last trade in Microsoft Stock

The Net Change Column: This is the change in price in Microsoft's stock from the opening price to the last trade price

The Bid Column: Shows the Inside Bid price, which is the best price at which the public can sell the stock.

The Ask Column: Shows the inside ask price for the stock, which is the best price at which the public can buy the stock.

The Size Column: Here you will see the number of shares of stock that are available at both the bid and the ask price (in hundreds). The number on the left represents the size available at the bid and the number on the right represents that size available at the ask.

The Volume Column: Volume is the same thing as the number of shares traded in the stock, so what displays here is the number of shares traded in the stock that day. In general, the higher the volume for a stock the narrower the "spread" which is the difference between the bid price and the ask price.

The Open Column: Shows the opening price for the day's trading.

The High and Low Columns: These columns show the highest and lowest price for the stock in that days trading.

These are the main columns that you will need to understand at a minimum when trading stocks. Other features which can be seen on this page by clicking the blue arrow to the far left of the quote window, and which we will cover the significance of in later lessons, are the dividend yeild, the price to earnings ratio, the earnings per share, the dividend amount, the frequency of the dividend, the Dividend Date, the 52 week high and low, the beta, put/call ratio, and shares outstanding.

Level II quotes, which basically show the prices in the market in addition to the inside bid/ask price we discussed above, can also be seen on this page, by clicking the blue arrow in the next row down, beside where it says "trade grid".

If you would like to watch multiple stocks, this can also be done from the quote page of the platform which you can bring up at the top of the page, by clicking the "quote" tab. Once you have done this click the options button in the upper left hand corner of the screen which will bring up a drop down menu, where you can then select "create new watch list". Once you have selected this you will be given the option to name your watchlist, and then select the stocks that you would like to watch by either entering their ticker symbol, or right clicking and selecting "symbol lookup".

Another nice feature of the ThinkorSwim platform is that trades can be initiated from any of the pages where you have your quotes setup, so traders will have multiple options on that front.

That's our lesson for today. In our next lesson we will review position sizing and buying vs. selling stock short so I hope to see you in that lesson. As always if there are any questions or comments please leave them in the comments section below, and good luck with your trading!