What Is a Stock Ticker Symbol?
A stock symbol or ticker is a unique series of letters assigned to a security for trading purposes. Stocks listed on the New York Stock Exchange (NYSE) can have four or fewer letters. Nasdaq-listed securities can have up to five characters.
Symbols are just a shorthand way of describing a company's stock, so there is no significant difference between those that have three letters and those that have four or five. Stock symbols are also known as ticker symbols.
Key Takeaways
- A stock symbol is an arrangement of characters—usually letters—representing publicly-traded securities on an exchange.
- When a company issues securities to the public marketplace, it selects an available symbol for its shares, often related to the company name.
- Investors and traders use the symbol to place trade orders.
- Additional letters added to stock symbols denote additional characteristics such as share class or trading restrictions.
Understanding Ticker Symbols
In the 1800s, when modern stock exchanges came into being, floor traders had to communicate the stock price of a traded company by writing or shouting out the name of the company in full. As the number of publicly traded companies increased from the dozens to the hundreds, they soon realized that this process was time-consuming and held up the information queue, unable to keep up with frequently-changing prices—especially after the advent of the stock-quoting ticker tape machine in 1867.
To be more efficient in relaying price changes on company stock to investors, company names were shortened to one to five alpha symbols. Today, stock tickers still exist, but digital displays have replaced paper ticker tape.
In addition to saving time and capturing a specific stock price at the right time, stock symbols are useful when two or more companies have similar monikers. For example, Citigroup (C) and Citizens Financial Group (CFG) have similar names, although they are not affiliated with each other: Citigroup is a global bank and Citizens Financial Group is a bank holding company for Citizens Bank. Both firms trade on the NYSE, with Citigroup trading under the ticker C and Citizens Financial Group under CFG.
There are also companies that are spin-offs of the same company and have similar stock symbols. In November 2015, Hewlett-Packard split into two separate companies—Hewlett Packard Enterprise (HPE) and HP Inc. (HPQ).
Hewlett Packard Enterprise serves as the business service and hardware division and focuses on servers, storage, networking, and security. HP Inc. is the consumer-facing computer and printer division and has a smaller market for its products than HPE.
Some companies that trade on the Nasdaq with fewer than four letters include Meta (META), formerly Facebook, and MoneyGram International (MGI). However, companies moving from the NYSE to Nasdaq can retain their stock symbols.
Types of Ticker Symbols
Preferred Shares
If the company has more than one class of shares trading in the market, then it will have the class added to its suffix. If it is a preferred stock, the letters "PR" and the letter denoting the class will typically be added. For example, a fictional preferred stock called Cory's Tequila Corporate Preferred A-shares would have a symbol such as CTC.PR.A. Different sources quote preferred shares in slightly different ways.
Share Voting Class
Some stock symbols indicate whether the shares of a company have voting rights, especially if the company has more than one class of shares trading in the market. For example, Alphabet Inc. (formerly Google) has two classes of shares trading on the Nasdaq with stock symbols GOOG and GOOGL. Common shareholders of GOOG have no voting rights since GOOG shares are Class C shares, while GOOGL shares are Class A shares and have one vote each. For example, Berkshire Hathaway has two classes of shares trading on the NYSE: Class A and Class B. Class A shares are listed with stock symbol BRK.A, and Class B shares, which have lower voting rights than Class A trade with the symbol BRK.B.
Other types of ticker sumbols include those designated for mutual funds or options listed on stocks.
Stock Ticker Modifiers
Stock symbols are also used to convey information to investors about the trading status of a company or its shares. This information is usually represented on the NYSE by one letter following a dot after the stock’s standard company symbol.
On the Nasdaq, a fifth letter is added to stocks that are delinquent in certain exchange requirements. For example, with ACERW, the first four letters comprised the stock symbol for Acer Therapeutics Inc. (ACER), and the last letter ‘W’ indicated that the shares had warrants attached. A company that is in bankruptcy proceedings will have the Q after its symbol, and a non-U.S. company trading in the U.S. financial markets will have the letter Y following its ticker symbol.
The meaning of the letters from A to Z are:
- A: Class A shares (e.g., BRK.A)
- B: Class B shares (e.g., BRK.B)
- C: Issuer Qualification Exception—the company does not meet all the exchange’s listing requirements but can remain listed on the exchange for a short time period.
- D: New issue of existing stock
- E: Delinquent or missed one or more SEC required filings (may also be denoted by .LF)
- F: Foreign issue
- G: First convertible bond
- H: Second convertible bond
- I: Third convertible bond
- J: Voting share
- K: Non-voting share
- L: Miscellaneous (e.g., foreign preferred, third-class of warrants, preferred when-issued, fifth class preferred shares, etc.)
- M: Fourth-class preferred shares
- N: Third-class preferred shares
- O: Second-class preferred shares
- P: First-class preferred shares
- Q: In bankruptcy proceedings
- R: Rights
- S: Shares of beneficial interest
- T: With warrants or with rights
- U: Units
- V: When-issued and when-distributed. These shares are about to go through a corporate action plan that has already been announced, such as a stock split.
- W: Warrants
- X: Mutual Funds
- Y: American Depositary Receipt (ADR)
- Z: Miscellaneous situations (same as the letter L)
- OB: Over-the-counter bulletin board
- PK: Pink sheets stock
- SC: Nasdaq Small-cap
- NM: Nasdaq National Market
Companies trading on the NYSE typically have three or fewer letters, although they can have four, representing their stock symbols. Nasdaq firms generally have four- or five-letter symbols (e.g., Adobe Inc. (ADBE), Apple Inc. (AAPL), and Groupon Inc. (GRPN)).
History of Ticker Symbols
The ticker symbol was invented by Edward Calahan, a telegraph operator who worked for the New York Stock Exchange (NYSE). Calahan developed the ticker symbol in 1867 as a way to quickly and accurately transmit stock prices over telegraph lines. Calahan's ticker symbol consisted of two letters (representing the company's name) followed by a number representing the number of shares being traded. The ticker symbol was transmitted via telegraph and displayed on tickertape machines, which were used to keep track of stock prices in near real-time.
Calahan's invention revolutionized the way stock prices were reported and helped to make the stock market more efficient and transparent. Today, ticker symbols are used by most major stock exchanges around the world and are an important part of the financial industry.
The first ticker symbol was used by the New York Stock Exchange (NYSE) on November 15, 1867, to identify the shares of the Union Pacific Railroad Company. The ticker symbol consisted of two letters (UP) followed by a number representing the number of shares being traded.
As the number of publicly traded companies and securities increased, the NYSE expanded the use of ticker symbols to include three letters in the 1920s and four letters in the 1950s. Today, ticker symbols are used by most major stock exchanges around the world and consist of up to five letters. In addition to identifying specific securities, ticker symbols have also become an important part of financial branding and marketing. Many companies choose ticker symbols that are easy to remember or have some connection to their business or brand.
How to Use a Ticker Symbol
Ticker symbols are used to identify specific publicly traded companies and the securities they issue. They are typically made up of one to five letters and are used to identify a specific stock or bond on a stock exchange or financial platform.
Here are some ways to use a ticker symbol:
- Identify a specific security: Ticker symbols are used to identify a specific security, such as a stock or bond, on a financial platform or stock exchange. For example, the ticker symbol for Apple Inc. is "AAPL," while the ticker symbol for the S&P 500 index is "SPX."
- Track stock prices: Ticker symbols are often used to track stock prices in real-time on financial news websites and stock ticker boards.
- Place a trade: Ticker symbols are used in stock trading orders to identify the specific security being purchased or sold.
- Research a company: Ticker symbols can be used to find information about a specific company, such as its financial statements and news articles.
To use a ticker symbol, you will typically need to enter it into a financial platform or stock exchange's search function or use it in a trading order. Ticker symbols are typically displayed alongside a company's name and stock price on financial news websites, stock ticker boards, and other financial platforms.
How Do I Find a Company's Stock Ticker Symbol?
To find a company's ticker symbol, you can search online financial databases, check the company's website, check the stock exchange's website, or ask a financial advisor or broker.
If you are having trouble finding a company's ticker symbol, it is possible that the company is not publicly traded or is listed on an exchange outside of the United States. In these cases, it may be more difficult to find the ticker symbol.
Why Is It Called a Ticker Symbol?
Stock symbols are called tickers because they first appeared as imprints on tickertape transmitted by telegraph from stock exchanges to investors around the country. This name persisted, even after physical tickertape was replaced by more modern technologies.
What Are Some Examples of Stock Tickers?
Here are some examples of popular ticker symbols:
- Apple Inc. (AAPL)
- Alphabet Inc. (GOOGL)
- Microsoft Corporation (MSFT)
- Amazon.com, Inc. (AMZN)
- Meta (formerly Facebook) Inc. (META)
- Tesla Motors (TSLA)
- The Goldman Sachs Group, Inc. (GS)
- The Dow Jones Industrial Average (DJIA)
- The S&P 500 Index (SPX)
- The NASDAQ Composite Index (COMP)
The Bottom Line
Stock ticker symbols are unique, alphabetic codes that are used to identify publicly traded companies and the securities they issue. They are typically made up of one to five letters and are used to identify a specific stock or bond on a stock exchange or financial platform. For example, the stock ticker symbol for Apple Inc. is "AAPL," while the ticker symbol for the S&P 500 index is "SPX." Ticker symbols are typically displayed alongside a company's name and stock price on financial news websites, stock ticker boards, and other financial platforms. They are also used in stock trading orders to identify the specific security being purchased or sold.
As an expert in the field of financial markets and securities, my deep understanding of stock ticker symbols is rooted in a comprehensive knowledge of their historical evolution, their practical applications in trading, and the various types and modifiers associated with them.
The concept of stock ticker symbols dates back to the 1800s when floor traders had to convey stock prices by shouting or writing out the full names of companies. The inefficiency of this process, especially with the advent of the stock-quoting ticker tape machine in 1867, led to the development of abbreviated symbols. This revolutionized the speed and accuracy of transmitting stock prices. Ticker symbols, which are usually one to five letters, serve as a shorthand representation of publicly-traded securities on exchanges.
One crucial aspect of ticker symbols is their role in differentiating companies with similar names or those arising from corporate actions, such as spin-offs. For example, the split of Hewlett-Packard into Hewlett Packard Enterprise (HPE) and HP Inc. (HPQ) in 2015 resulted in two distinct entities with unique symbols.
Ticker symbols also provide information beyond company identification. Additional letters may be added to denote characteristics such as share class, voting rights, or trading status. For instance, Alphabet Inc. (GOOGL and GOOG) has two classes of shares with different voting rights.
The evolution of ticker symbols from the early two-letter format to the current one-to-five-letter convention has been instrumental in enhancing efficiency and transparency in the stock market. Ticker symbols are not just identifiers; they also convey information about the trading status of a company or its shares through modifiers, especially on the NYSE and Nasdaq.
The history of ticker symbols is tied to the invention by Edward Calahan in 1867, a telegraph operator at the New York Stock Exchange. Originally comprising two letters and a number, ticker symbols have evolved over time to accommodate the growing number of publicly traded companies, expanding to three letters in the 1920s and four letters in the 1950s.
Understanding ticker symbols is essential for investors and traders. They use these symbols to identify specific securities, track stock prices, place trade orders, and conduct research on companies. Ticker symbols play a crucial role in financial branding and marketing, with companies often choosing symbols that are memorable or have a connection to their business.
In conclusion, my expertise in the realm of stock ticker symbols encompasses a thorough grasp of their historical development, practical applications, and the diverse types and modifiers associated with them. I am well-versed in their significance for investors, traders, and the broader financial industry.
