The history of the stock ticker and ticker symbols begins with the ticker tape machine invented by Thomas Edison. The original need for symbols no longer exists, but stock tickers are still alive today.
Ticker symbols are part of Wall Street's history, dating back to the 1800's and the telegraph. The original stock ticker tape machines translated the information transmitted over telegraph wires onto tapes that could be read by investors. In order to save bandwidth, company names were assigned one and two letter stock tickers or symbols. The most actively traded companies were assigned a single letter stock symbol.
Stock tickers are unique for each company, regardless of the stock market or exchange on which they trade. If a company has a one or two letter stock symbol, that company is trading on the NYSE. That's because the NYSE is the oldest stock exchange in America, and one and two letter symbols were the first to be assigned to companies. If a company has three letters, then they trade on either the NYSE or the AMEX (now part of the NYSE Euronext). If the stock symbol is greater than three letters, then the company trades on the NASDAQ.
When we think of stock tickers today, we usually have a vision of what are termed "dynamic stock tickers." This technology has its roots with the first ticker tape projection system installed at the New York Stock Exchange back in 1923.
Dynamic stock tickers are a traveling two-line display that allows market analysts to see real time stock prices that are retrieved via direct data feeds from a large variety of information providers.
Although bandwidth is no longer a constraint, the stock ticker, or symbol, continues to be used to save space on trading monitors. It's also a convenient way to accurately identify the stock of a company. Here is an example of a ticker as seen rolling past the bottom of a television tuned into CNN:
MSFT 10K @ 35.13 ^ 0.05
The first four letters in this example refer to the ticker symbol, in this case MSFT, or Microsoft Corporation. The next set of data - 10K - refers to the most recent trade volume being quoted. The numbers after the "at" symbol refer to the price at which the trade occurred, in this example $35.13 per share. The up or down symbol tells us whether the current trading price is higher or lower than the previous trading day's closing price. Finally, the last set of numbers refers to the change from the previous day's close.
Translating the above stock ticker, it would be read as:
Microsoft Corporation's last trade of 10,000 shares was exchanged at $35.13, which is up by $0.05 from the previous trading day's close.
Companies that trade on the NASDAQ are assigned four letter stock symbols. But sometimes there is a fifth symbol, or letter, that appears for a particular stock. In the same manner, companies that are assigned symbols on the NYSE can have an additional symbol assigned to them "after the dot." For example, PEG.A refers to the company assigned the stock ticker of PEG and the ".A" gives the investor some additional information about this particular stock. In this example, it is considered Class A stock of Public Service Enterprise Group.
Mutual funds are always assigned four letters plus an "X" at the end, so they can be quickly identified by traders. Another symbol that investors should be aware of is the notorious "E," which means the company has been delinquent in their filing with the U.S. Securities and Exchange Commission. (This typically signals trouble at the company.)
Below appears a complete list of fifth symbols, after the dot letters, as well as their meanings:
|A - Class A||K - Non Voting||U - Units|
|B - Class B||L - Miscellaneous Situations||V - When Issued and When Distributed|
|C - Exempt from NASDAQ||M - 4th Class Preferred||W - Warrants|
|D - New Issue||N - 3rd Class Preferred||X - Mutual Fund|
|E - Delinquent with SEC||O - 2nd Class Preferred||Y - ADR (American Depository Receipts)|
|F - Foreign||P - 1st Class Preferred||Z - Miscellaneous Situations|
|G - First Convertible Bond||Q - Bankruptcy in Process|
|H - 2nd Convertible Bond||R - Rights|
|I - 3rd Convertible Bond||S - Beneficial Interest|
|J - Voting||T - Warrants or Rights|
Today, a number of organizations offer streaming stock tickers for desktop computers. For example, NASDAQ offers a free toolbar that includes one-click stock lookups as well as auto-updating of the display. Yahoo Finance has a similar offering. Tools are also available in the Android Play market, as well as Apple's App store.
About the Author - Stock Tickers and Ticker Symbols - Copyright © 2005 - 2016 Money-Zine.com (Last Reviewed on February 11, 2016)