How to read the price of a stock

I have just met a friend who told me that she is having problem understanding the basic of reading the price of a stock. Therefore, i decided to include an explaination on this topic in my blog today. There is three component which you look at when we talk about stock price.

1. Last done Price: This is the price which the stock was last transacted
2. Buy Price: The price which buyer are willing to buy from you
3. Sell Price: The price which seller are willing to sell to you

Example, last done price for XYZ Ltd is $1/ share. However buy price is $0.99 and sell price is $1. As a buyer, you would only be able to buy the stock if you are willing to pay $1 for it. For a seller, you would need to sell at $0.99 if yo u want to sell your shares. You are allowed to queue for the price that you want to sell/ buy provided that it is within ten bids from the last done price.

So what is this bids that i am referring to? For shares that are priced above $1, each bid will be $0.01, example $1.01, follow by $1.02. For shares that are priced $1 and below, each bid will be $0.005, example $0.9, follow by $0.905.

Hope the above is able to help you with the basic of reading stock price. Good luck and have fun trading.