Price graphs: why not percent change?
The actual price is represented on charts and not the change in price as a percentage, because it is the actual price which is used in all other parts of analysis (both technical and fundamental), and it is the actual figure the security is bought and sold at. A change in price has to be relative to a previous price at a previous time, and we can easily work out the change in price over any given time period. I think what you are concerned about is how to compare a certain actual price change in low priced securities to the same actual price change in a higher priced securities.  For example: $1.00 rise in a $2.00 stock representing a 50% increase in price; $1.00 rise in a $10.00 stock representing a 10% increase in price. On a standard chart both of these look the same, as they both show a $1.00 increase in price. So what can we do to show the true representation of the percentage increase in price? It is actually quite simple. You view the chart using a log scale instead of a standard scale (most charting packages should have this option). What may look like a bubble on a standard scale chart, looks like a healthy uptrend on a log scale chart and represents a true picture of the percentage change in price. Example of Standard Price Scale VS LOG Price Scale on a Chart Standard Price Scale  On the standard scale the price seems to have very little movement from Mar09 to Jan12 and then the price seems to zoom up after Jan12 to Mar13. This is because a 4% increase (for example) of $0.50 is only $0.02, whilst a 4% increase of $7.00 $0.28, so the increases seem much bigger at the end of the chart. LOG Price Scale  On the LOG chart however, these price changes seem to be more evenly displayed no matter at what price level the price change has occurred at. This thus give a better representation of how fast or slow the price is rising or falling, or the size of the change in price. Actually, total return is the most important which isn't necessarily just price change as this doesn't account for dividends that may be re-invested.  Thus, the price change isn't necessarily that useful in terms of knowing what you end up with as an ending balance for an investment. Secondly, the price change itself may be deceptively large as if the stock initial price was low, e.g. a few dollars or less adjusting for stock splits as most big companies will split the stock once the price is high enough, then the percentages can be quite large years later. Something else to consider is the percentage change would be based on what as the initial base.  The price at the start of the chart or something else?  Carefully consider what you want the initial starting point to be in determining price shifts here as one could take either end and claim a rationale for using it. Most people want to look at the price to get an idea of what would X shares cost to purchase rather than look at the percentage change from day to day. I am in complete agreement with you.  The place i have found with the sort of charts you are looking for is stockcharts.com.   To compare the percentage increase of several stocks over a period of 2 market-open days or more, which is quite useful to follow the changes in various stocks… etc., an example:  Here the tickers are AA to EEEEE (OTC) and $GOLD / $SILVER for the spot gold / silver price (that isn't really a ticker).  It is set to show the last 6 market days (one week+)...the '6' in '6&O'.  You can change it in the URL above or change it on the site for the stocks you want... up to 25 in one chart but it gets really hard to tell them apart!  By moving the slider just left of the ‘6’ at the bottom right corner of the chart, you can look at 2 days or more.  For a specific time period in days, highlight the ‘6’ and type any number of market-open days you want (21 days = about one month, etc.).  By setting a time period in days, and moving the entire slider, you can see how your stocks did in the last bull/bear run, as an example. The site has a full how-to, for this and the other types of charts they offer. The only problem is that many OTC stocks are not charted. Save the comparison charts you use regularly in a folder in your browser bookmarks.  Blessings.  I see the entire needed link isn't in blue... but you need it all.
&gt; So: what do i do to have the monthly %change? I was thinking (last day of the mont CP - 1st day of the month OP)/ 1st day of the mont opening price.  No, use the same day (usually month end) of each month (i.e. December 31 vs. January 31). Use closing prices only.   Keep in mind, it may make more mathematical  sense to use LN (natural logs) to determine %-change and standard deviation.   The simplest way to compare the riskiness of each is just to compare St. Dev. You can, of course, go into more detail.   If you want to impress your professor, look up the efficient frontier and make one for each portfolio. The point of that question is to test if the user can connect shares and stock price.  However, that being said yeah, you're right. Probably gives off the impression that it's a bit elementary. I'll look into changing it asap. It helps to put the numbers in terms of an asset. Say a bottle of wine costs 10 dollars, but the price rises to 20 dollars a year later. The price has risen 100%, and your dollars have lost value. Whereas your ten used to be worth 100% of the price of bottle of wine, they now are worth 50% of the risen price of a bottle of wine so they've lost around 50% of their value. Divide the old price by the new inflated price to measure proportionally how much the old price is of the new price. 10 divided by 20 is 1/2 or .50 or 50%. You can then subtract the old price from the new in proportional terms to find how much value you've lost. 1 minus 1/2 or 1.00 minus .50 or 100% minus 50%. I have watched the ticker when I have made a transaction. About ¼ of the time my buy (or sell) actually moves the going price. But that price movement is wiped out by other transactions within two (or so) munites.  Is your uncle correct? Yes. Will anyone notice? No. Instead of a price chart can use a performance chart, which is usually expressed as a percentage increase from the original purchase price.  To factor in the dividends, you can either add in all of your dividends to the final price, or subtract the accumulated dividends from your cost basis (the initial price). "The fallacy in your question is in this statement: ""The formulas must exist, because prices can be followed real time."" What you see are snapshots of the current status of the stock, what was the last price a stock was traded at, what is the volume, is the price going up or down.  People who buy and hold their stock look at the status every few days or even every few months. Day traders look at the status every second of the trading day.  The math/formula comes in when people try to predict where the stock is going based on the squiggles in the line. These squiggles move based on how other people react to the squiggles.  The big movements occur when big pieces of news make large movements in the price. Company X announces the release of the key product will be delayed by a year; the founder is stepping down; the government just doubled the order for a new weapon system; the insiders are selling all the shares they can. There are no formulas to determine the correct price, only formulas that try to predict where the price may go." "NYT republished a nifty infographic that shows how the S&P 500 performs over various time horizons. If you study it for a bit, you'll see that 10 percent is not likely over time that you'll earn 10 percent annually after inflation. Most people quoting the higher number are working with numbers before inflation.  The above linked chart is misleading in the following sense: it groups into five categories, who's boundaries are demarcated by percentages of interest. But we'd rather see them clustered by those percentages. For example, 6.9 percent falls into the neutral category (better than investing in fixed interest securities, but still below market average), but 7.1 falls into the ""above average"" category. The effect is that we will treat the neutral color that dominates the long term trend as being somewhere in the middle of 3-7, when I suspect that's not the case. Some day I'll probably make my own version and see how that plays out.  So that all said, if you look at the 30 year diagonal, you can see there's still quite a bit of variation in returns. Unfortunately I can't turn this into a single number for you, but grab a spreadsheet and some market data if you want one." If you're trying to teach them the value of money and quantifying the dollar difference between prices, one very effective way to do this is by using bar charts. For instance, if a toy is $5, and movie they really want to see is $10, and a vacation they want to go on costs $2000, it can be a useful tool to help explain how the relative costs work. I don't have a source for this, but intuitively more finance options could increase people's willingness to pay, which is akin to shifting the demand curve outwards, leading to an increase in price, all other things equal. Consider asking a variation of this question in /r/askeconomics for a better answer. The volatility measures how fast the stock moves, not how much. So you need to know the period during which that change occurred. Then the volatility naturally is higher the faster is the change. While there are lots of really plausible explanations for why the market moves a certain way on a certain day, no one really knows for sure.  In order to do that, you would need to understand the 'minds' of all the market players.  These days many of these players are secret proprietary algorithms.  I'm not quibbling with the specifics of these explanations (I have no better) just pointing out that these are just really hypotheses and if the market starts following different patterns, they will be tossed into the dust bin of 'old thinking'. I think the best thing you can explain to your son is that the stock market is basically a gigantic highly complex poker game.  The daily gyrations of the market are about individuals trying to predict where the herd is going to go next and then after that and then after that etc. If you want to help him understand the market, I suggest two things.  The first is to find or create a simple market game and play it with him.  The other would be to teach him about how bonds are priced and why prices move the way they do.  I know this might sound weird and most people think bonds are esoteric but there are bonds have a much simpler pricing model based on fundamental financial logic.  It's much easier then to get your head around the moves of the bond markets because the part of the price based on beliefs is much more limited (i.e. will the company be able pay & where are rates going.)  Once you have that understanding, you can start thinking about the different ways stocks can be valued (there are many) and what the market movements mean about how people are valuing different companies. With regard to this specific situation, here's a different take on it from the 'priced in' explanation which isn't really different but might make more sense to your son: Pretend for a second that at some point these stocks did move seasonally.  In the late fall and winter when sales went up, the stock price increased in kind.  So some smart people see this happening every year and realize that if they bought these stocks in the summer, they would get them cheap and then sell them off when they go up.  More and more people are doing this and making easy money.  So many people are doing it that the stock starts to rise in the Summer now.  People now see that if they want to get in before everyone else, they need to buy earlier in the Spring.  Now the prices start rising in the Spring.  People start buying in the beginning of the year... You can see where this is going, right?  Essentially, a strategy to take advantage of well known seasonal patterns is unstable.  You can't profit off of the seasonal changes unless everyone else in the market is too stupid to see that you are simply anticipating their moves and react accordingly. Doesn't work as it would be inflationary.  Businesses would raise prices knowing they could get more revenue. This cycles throughout the supply chains which in turn cause prices of other products to increase etc.  And why on earth you wouldn't means test something like this beyond me. "Their algorithm may be different (and proprietary), but how I would to it is to assume that daily changes in the stock are distributed normally (meaning the probability distribution is a ""bell curve"" - the green area in your chart).  I would then calculate the average and standard deviation (volatility) of historical returns to determine the center and width of the bell curve (calibrating it to expected returns and implied volaility based on option prices), then use standard formulas for lognormal distributions to calculate the probability of the price exceeding the strike price. So there are many assumptions involved, and in the end it's just a probability, so there's no way to know if it's right or wrong - either the stock will cross the strike or it won't." I mentioned in other posts that it's not unreasonable that prices might rise slightly. Demand would go up and some labor costs would as well. To your point, I can say that prices would not go up 1:1, that's an absurd hypothesis that doesn't stand up to even a sniff test. The last column in the source data is volume (the number of stocks that was exchanged during the day), and it also has a value of zero for that day, meaning that nobody bought or sold the stocks on that day. And since the prices are prices of transactions (the first and the last one on a particular day, and the ones with the highest/lowest price), the prices cannot be established, and are irrelevant as there was not a single transaction on that day. Only the close price is assumed equal to its previous day counterpart because this is the most important value serving as a basis to determine the daily price change (and we assume no change in this case). Continuous-line charts also use this single value. Bar and candle charts usually display a blank space for a day where no trade occurred.