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While investing in the US stock market, investors must know one of the important aspects of the ticker symbol. Every stock or security name has a certain number or letters along with it. This is the stock ticker symbol. 

What is a Ticker?

A ticker is an abbreviation used to identify a publicly traded security. A ticker symbol is a combination of letters, numbers or characters. The organization issuing securities in the market chooses a ticker symbol for securities. They are also referred to as ‘stock symbols’. Each security listed on the stock exchange bears a unique ticker symbol. This ensures a smooth flow of day-to-day financial transactions in the stock market. Moreover, investors use the tickers for trading or investing in securities on the stock exchange. 

Some examples are – 

  • The New York Stock Exchange uses a ticker symbol with three letters or less, like ‘NYT’ for New York Times Company and ‘T’ for AT&T.
  • NASDAQ and the American stock exchange use ticker with four or more letters.
  • Symbols ending with ‘X’ denote mutual funds.
  • There are certain specific symbols that denote status or type of security, i.e. ‘Q’ indicates the company is under bankruptcy. ‘Y’ denotes security as ADR

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History of Ticker

The history of ticker began when the New York Stock Exchange began trading as a modern stock exchange in the 1800s. The floor traders shouted the company’s name or wrote the company’s name on a paper slip to be traded. Open outcry or communicating trades via signals and shouts had dominated the markets for centuries. Later, the information from the stock exchange was communicated via email or messenger to investors. 

In 1867, Edward A Calahan invented the first ticker tape machine, which became a dedicated financial information delivery system. Eventually, Thomas Edison upgraded this machine. This new technology revolutionised market trading. 

This machine printed stock symbols and stock information on a ticker tape. The telegraph wire transmitted the information on ticker tape including trades and prices of a security. It printed easy-to-read symbols about the company’s stock price. 

As more and more company stocks were introduced, the ticker tape machine helped to speed up the delivery of trade information. Also, stock exchanges developed a way of codifying the abbreviated company names. The company names were shortened up to five letters. Trading became more efficient, especially with a faster ticker tape system. Eventually, the stock symbols and information were available digitally. However, the concept of stock ticker remained the same as ticker symbols. 

What Does a Ticker Show and How to Read it?

The stock ticker that appears on the screen shows the security’s price and how they are trading in real-time. By looking at the stock ticker, you can see the ticker symbol, followed by additional letters and numbers. This provides additional information about the company’s pricing, whether the stock price is going up or down, trade volumes and more. Therefore, investors can easily search on a broker or exchange website by the company name or symbol to find the investment data. 

Different Aspects of Ticker

Let us understand the different aspects of the ticker symbol and know how to read it – 

  • First Letter: This is the most common ticker symbol which matches the initial letter of the company’s name. For instance, ‘F’ is the stock symbol for Ford motor and ‘C’ is the stock symbol for Citigroup. 
  • Company Name: This is a relatively common symbol for identifying established companies. For instance, AAPL is the ticker symbol for Apple and MSFT for Microsoft. 
  • Product Name: Some companies use the ticker symbol as the reference for products they sell, making it easier to recollect. For instance, The Cheesecake Factory uses CAKE. Similarly, Harley Davidson uses HOG (an informal term for identifying motorcycles). 
  • Customer Experiences: Some companies in the service industry use symbols as they sell to customers. For instance, Yum! Brands are the parent company of KFC, Pizza Hut and Taco Bell, using the symbol YUM. 
  • Sounds: This is a creative way to distinguish the product’s experience in the market. For instance, the National Beverage Corporation (maker of carbonated drinks) uses FIZZ as the symbol to create the essence of the product.
  • Numbers: Understanding the numbers in ticker symbols may not be easy unless one is familiar with them. This is mainly used in Japan. For instance, the symbol for Sony Corporate is 6758, and Toyota Motor Corporation is 7208 on the Tokyo Stock Exchange. There is a specific method where numbers from 6000 are used for machinery and electronic companies in Japan. Similarly, numbers from 7000 are used for transportation and car companies. 

Usually, the first digit indicates the general industry in which the company operates. However, memorising the random numbers in Japan is difficult as they do not have any other specific descriptions. 


Let us understand with an example of ticker tape:

ticker tape
MSFTTicker symbolUnique characters to identify the company
5KShares tradingThe volume of shares trading being quoted. Abbreviation where K=1000, M= 1 million, B= 1 billion
61.25Price tradingThe price per share of a particular stock
🔻Change directionIndicates where the stock is trading higher or lower than the previous day closing price
1.35Change amountThe price difference from the previous day’s closing price

Tips to Read

  • Investors must keep in mind the spelling of tickers as there can be a thin line difference between two stocks having identical ticker symbols. For instance, in 2013, due to the popularity of Twitter IPO (TWTR), many investors mistakenly invested in Twitter Home Entertainment (TWTRQ) which turned out to be a bankrupt electronic firm. Tickers ending with ‘Q’ indicate bankruptcy. 
  • Suppose a ticker symbol has the letter E on NASDAQ or LF on NYSE. In this case, it indicates that the associated company has fallen behind on its reporting obligation to SEC (Securities Exchange Commission). These letters are added at the end of the ticker symbol. Also, these companies get a grace period to submit the reporting requirements. After the requirements are approved, these letters are removed. The commission removes the security from trading if the grace period is over and the company does not submit the requirements. 

Types of Tickers

Most tickers are three or four letters and, in some cases, numbers or hyphens. Also, some have optional modifiers or extensions. These modifiers are used to convey the type of security (‘X’ for mutual fund), type of stock (such as preferred stock) or class of stock (denotes shareholder privileges). 

Some companies create different classes of shares to allow the management team to hold a higher percentage of the vote than they hold in equity. In other words, Class A shareholders have privileges that may not be available to the other class holders of the same company’s stock.

For instance, Berkshire Hathway, which has two classes of shares that trade on NYSE, is listed with the symbol of BRK.A and BRK.B for its class A and B shares, respectively.

Ticker Modifiers

Every stock exchange has its own rules for symbols which is helpful to understand broadly how stock tickers appear. Most of the variations are caused by modifiers. Some of the commonly used modifiers are.

  • A: Class A stock
  • B: Class B stock
  • D: signifies newly issued shares or reverse stock split
  • F: reserved for companies which are listed on foreign stock exchanges
  • J: used by NASDAQ for stocks with voting rights
  • P: preferred shares
  • Q: the company has filed for bankruptcy protection
  • U: used for new issues and group shares of stock
  • W: stock warrants
  • X: used for mutual funds
  • Y: for stocks that trade as American Depository Receipts (ADR)

Companies can change their symbol during a merger or acquisition. Also, the companies that move from NYSE to NASDAQ can keep their symbol the same. 

Importance of Ticker Color

Publicly listed companies are allowed to trade on different stock exchanges. However, no two companies will have the same ticker symbol on one stock exchange. Also, different colors are used on stock tickers to show the stock trading. The ticker color is a crucial indicator of stock performance. The following are the different colors of ticker and their importance – 

  • Green: This shows that the stock is trading higher than the previous day’s closing price.
  • Red: This indicates that the stock is trading lower than the previous day’s closing price. 
  • Blue/White: It indicates that the stock performance is unchanged from the previous day’s closing price. 

Therefore, knowing the stock ticker symbol and color is significant while buying and selling shares. It helps investors to quickly research the companies in which they are willing to invest as it provides easy access to company information. Also, understanding that thousands of companies are available on the stock exchange, ticker helps to avoid confusion since every company has a unique symbol. 

Frequently Asked Questions

What does ticker mean in stocks?

A ticker is an abbreviation or a short code used to identify a company that issues stocks or securities. The stock exchange uniquely designs these codes for each company. It is kept short to help investors and traders easily identify stocks.

Who decides the ticker?

The ticker symbol was created and standardised by Standard & Poor (S&P). Stock exchanges across the world use it. Companies that trade on NYSE have three letter symbols, while those listed on NASDAQ have four letters. 

Can a stock change its ticker?

A company may change its ticker symbols for various reasons like mergers, acquisitions or delistings. Sometimes, they may also change due to new branding opportunities or when they change their name (facebook changed to META).

What companies make it to the ticker?

All the publicly traded companies that are listed on the stock exchange have a ticker symbol.

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