Net change

DEFINITION of net change

Net change is the difference in an asset’s closing price from one day to the next. It is a commonly used method of quoting the price movements of stocks and funds.

WHAT IT IS IN ESSENCE

Net change refers to the difference in closing price of a stock, bond, mutual fund, ETF or other traded financial instrument from one period to the next.

It can be displayed as either a positive or negative, or, on rare occasions, neutral, depending on the direction of the price movement.

The impact of a dividend payment or stock split is negated when displaying net change.

It 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. Net change is calculated both by the exchange or trading system and by various stock market reporting services. It typically shows up next to the last sale price for the day.

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.

HOW TO USE

Net change is used in the fundamental analysis, to analyze stock prices and can be either positive or negative.

Let’s say that the stock of company XYZ closed at $9 per share yesterday. Today, it closed at $9.65. The net change is $0.65. Often the net change includes a + or – sign to make the direction of the change clear.

It refers to the difference in closing price of a stock, bond, mutual fund, ETF or other traded financial instrument from one period to the next.

This is a measure of performance and most commonly measured on a daily basis. Particularly for investors who must settle their accounts after every trading day. The investor can calculate it on a monthly, quarterly or annual basis.