What Does "Net Change" Mean in the Stock Exchange?

Net change indicates whether a stock is increasing or decreasing in value. It is based on the actual trades of each stock and is reported at the end of each trading day. It is calculated both by the exchange or trading system and by various stock market reporting services that compile tables for newspapers and other media outlets. It typically shows up next to the last sale price for the day.

Change Defined

The Nasdaq electronic trading system defines net change as "the difference between a day's last trade and the previous day's last trade." For years, it was expressed in fractions, such as 1/8 or 1/4, but with the advent of computers, services began translating those figures into dollar values. The net change for a stock like IBM now will be shown, for instance, as plus 2.04.

Change Reported

The actual net change usually is the last column in the table. Each line typically shows an abbreviated name for the company that issued the stock, the sales volume or number of shares traded, the last or most current sale price and the change. Intra-day tables, generated before the close or end of trading for the day, will base the change on the last completed trade before the table was compiled.

YTD Change

Weekly market tables usually display a net change for the week, reflecting all price fluctuations during the week. Some tables also include a "YTD" column, which shows the percentage of gain or loss in price during a trading week. This is based on the trading year starting with Jan. 1.

Change Effects

The "close" or last reported sale price may be in bold-face type in a newspaper table if the price change is more than 5 percent from the previous day. Another figure in the tables affected by the price change is the P/E ratio, or relation of the stock price to the company earnings. That is last share price divided by the earnings per share reported for the last four quarters.

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