Bid price vs ask price – What do they mean?

Beginner investors can easily get confused when confronted with bid prices and ask (or offer) prices. Which one is to use if you’re buying a security? And, which one when selling the security? Learning objectives: Define the concepts of bid prices and ask prices. Interpret bid prices and ask prices from the perspectives of investors […]

Market order vs limit order – Liquidity, uncertainty

Imagine that you own shares of Twitter, Inc. and are thinking of selling those shares to help finance the purchase of a new car. What type of trade order should you submit if you want to purchase the car as soon as possible? And, what type of order is more suitable if you would prefer […]

Trade order – Which are the essential features?

In order to trade securities, investors need to submit trade orders, typically through their brokers. Making a mistake when submitting a trade order can be very costly for investors. But, how does a typical trader order look like? What are its essential elements? Learning objectives: Define the concept of a trade order. Understand its essential […]

Creating a histogram of stock returns with Excel

An easy way to visualize the distribution of stock returns is to plot a histogram. In this tutorial, we will show how to create a histogram using Excel. Moreover, we will explain how to interpret a histogram of stock returns. Using Excel’s “data analysis” tool to plot a histogram We will be working with monthly […]

Stock prices and returns – How to plot time series?

The purpose of this tutorial is to show you how to plot time series of stock prices and returns using Excel. And, we will also explain how to interpret these plots to gain a better understanding of stock prices and returns. We will use Microsoft Corporation (MSFT) shares and Kellogg Company (K) shares as examples. […]

Stock price data – How to download?

In this tutorial, we will explain how to download stock price data from Yahoo! Finance. Yahoo! Finance is a great source for obtaining historical data on financial securities such as stocks, stock market indices (e.g., S&P 500, Dow Jones Industrial Average, FTSE 100), and ETFs. It has global coverage, and the data is free to download. […]