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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But ever wondered how does the stock market work and what goes in into making such kind of money in the stock market.

Do not get intrigued by the stock market but just start by understanding the stock market and getting to know the very basic terms and how the stock market functions.

A few basic explanations of the terms that will help you get the understanding of the stock market basics are described below.

What is a stock? The simple answer to this question is that it represents the ownership of the company’s assets and profits. The ownership may be if you start to calculate in percentage terms may represent only .005% of a company or even lesser based on how much shares are issued to the public from the total number of shares.

What is a stock exchange? Let us look from the angle that you are .005% owner of a company and would want to sell your portion of the company to somebody else. That avenue where you would go to sell those shares is what is called a Stock Exchange.

Physical Stock Exchange – New York Stock Exchange is an example of a physical stock exchange. By physical it means that in theory you can go there and sell your share of .005% though in all practicality you will not be allowed to do so and what you would need to do is contact a stock broker or a brokerage firm who would in turn contact somebody who is allowed to buy and sell shares on the floor of the exchange and these
brokers would charge you a fee or brokerage for selling your shares.

Online Stock Exchange – In today’s world of computers and advanced technology, you would need to leave your house and try to sell your share. All you would need is an account with a firm authorized to trade on the virtual stock exchange. This virtual stock exchange eliminates the need to have a physical place to buy or sell shares. On such stock
excahge which you hear very commonly is National Association of Securities Dealers Automated Quotations System or NASDAQ.

What is a share price ? Let us say that your share of .005% is in great demand and somebody would be willing to a pay higher price than what you would have bought it at. That means you have made a profit or else the negative can happen that it is not in great demand since the company is not doing good then you may have to sell at a lower price. So, really at any given point of time there are people who think the company is doing
good and would be willing to pay you a higher price or some people who would be willing to sell at that price as they have made a decent amount of profit and are willing to get out or they think that the price is likely to go down and they are trying to sell the same share.

Stock Market for beginners can be challenging and treacherous to navigate but if you play your strategies right, you can definitely reap some handsome rewards.

Related posts:

1. Understanding the stock market investing for beginners
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3. Finding Stock Symbols – A Must Know For Stock Market Beginners