Stock Ticker Symbols – How to read a stock ticker?
A stock ticker symbol gives out a lot of information about the company in just a few letters. For a beginner or an experienced investor, it is very important to be able to understand and read stock tickers quickly. The ticker tells you the name of the company, which exchange the stock is being traded, is the company filing for bankruptcy and lot more. But, looking at a stock symbol or a stock ticker, you would be wondering you to decipher these things from a few characters. Let us try to explain the stock ticker in plain English.
What is a stock ticker?
A ticker is a combination of alphabets or numbers which identify a particular security on a particular exchange. There are tickers available for stocks bonds, options, futures etc but stock tickers are the ones which are most commonly used.
The origin of the word ‘ticker’ has an interesting story. The word evolved in the beginning of last century when the news of buy and sell transactions used to get delivered to brokers’ offices by noisy machines that essentially stamped share price data onto thin strips of rolled paper. These noisy machines made a very distinct ticking noise during their busiest periods, which is how tickers eventually earned their name.
A few examples of tickers are:
AT&T has the ticker T in New York Stock Exchange
Microsoft has ticker MSFT in NASDAQ
Google has ticker GOOG in NASDAQ
EXXON Mobil Corporation has ticker XOM at New York Stock Exchange
As you can notice, the number of characters in the ticker is varying. This is because each exchange has certain guidelines around the number of characters which should be present in the stock ticker. New York Stock Exchange (NYSE) mandates that stock ticker should have ticker of 1, 2 or 3 characters only while NASDAQ needs it for 4 or 5 characters.
The stock tickers are represented in different ways at different exchanges. For example, ticker of Exxon Mobil listed in NYSE can be represented as XOM.N. A ticker in London stock exchange will have .L as suffix of the stock ticker. Similarly, in Mexico exchange, it has .MX as suffix. For a company listed in various exchanges (like international companies), the characters of the company stock ticker will be different at different exchanges. For example Rio Tinto has different tickers in NYSE (RTP) and over the counter markets (OTC: RTPPF).
It is also not important to have companies name of initials in the stock ticker. Many times the initials are not available since they have been taken by other companies. Therefore, companies have innovative tickers which creative and represent what they do. For example tickers for Avis Budget group have ticket CAR, Harley Davidson has HOG, Sun Microsystems has JAVA, and Boston Beer Company has SAM etc.
While a ticker symbol can inform you of where a stock trades, it can also tell you whether a company is delinquent in its regulatory filings or is undergoing bankruptcy proceedings, among other details. Therefore, understanding the stock ticker symbols is very useful for those interesting in learning about stock market.
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