How to Read the Market Index

1. Learning to Read the Market Index

Most securities firms have large color display screens on the walls of their trading halls, commonly referred to as the "market index board." Most trading floors use different colors to indicate whether a stock's price has risen or fallen compared to the previous day's closing price. The main information displayed on the board includes:

• Previous Closing Price: The last traded price of the previous day. After the implementation of the price limit system in December 1996, the Shenzhen Stock Exchange adjusted the calculation method for the "closing price" as follows: Closing Price = Turnover in the Last Minute / Trading Volume in the Last Minute.

• Opening Price: The first traded price of the current trading day.

• Highest Price & Lowest Price: The highest and lowest traded prices since the market opened today.

• Latest Price: The price of the most recent trade.

• Bid Price: The price at which buy orders for a stock have been placed but not yet executed, typically showing only the highest bid price. For investors, this serves as a reference for selling.

• Ask Price: The price at which sell orders for a stock have been placed but not yet executed, typically showing only the lowest ask price. For investors, this serves as a reference for buying.

• Buy Orders (Buy Volume): The total number of shares currently being bid for purchase.

• Sell Orders (Sell Volume): The total number of shares currently being offered for sale.

• Price Change: Indicates whether the latest price has risen or fallen compared to the previous day's closing price. It can be displayed in two ways:
  
  

  1. Directly showing the monetary change (e.g., +¥0.50 or -¥0.30).

  2. Showing the percentage change (e.g., +1.2% or -0.8%).
     Different firms may display only one of these (absolute or relative change), requiring manual calculation to derive the other.
     
     

• Current Lot Size: The trading volume of the most recent transaction (measured in "lots," where 1 lot = 100 shares).

• Buy Lots: The total number of buy orders within 3 price levels below the latest price.

• Sell Lots: The total number of sell orders within 3 price levels above the latest price.

• Trading Volume: The total number of lots traded for the stock since the market opened today (multiply by 100 to convert to shares).

• Total Turnover: The total monetary value of all trades for the stock since the market opened today, usually displayed in "10,000 yuan."