Understanding The Stock Symbol
If you are new to the stock market you probably wondered what is with those strange looking stock symbols that flash on the tv screen every so often.
Or perhaps you wondered what is the purpose of a stock symbol and what do they mean?
Well, a stock symbol or also called a ticker symbol is a short abbreviation/acronym used to uniquely identify the particular stock of a publicly traded company in the stock market.
Depending on the country, a stock symbol may consist of letters, numbers or a combination of both.
When a company applies to be listed on a particular exchange and issues stock to the public marketplace, it selects an available ticker symbol for its stock which investors use to place trade orders.
Every listed stock has a unique ticker symbol, which facilitates the vast array of trade orders that flow through the financial markets every day.
Stock ticker symbols serve a variety of purposes:
- it identifies a particular company trading on the stock exchange
- investors uses the ticker symbol to place trade orders
- for investors to look up the current quote of a particular stock
- it typically identifies which exchange the stock trades on (not always though)
The Origin of “Ticker”
The term “ticker symbol” dates back to the early days of the stock market and originally referred to the stock symbols that were printed on the ticker tape of a ticker tape machine. Ticker tapes were basically stamped stock price data onto thin strips of rolled paper and when these noisy machines were running they made a very distinct ticking noise during their busiest periods, which is how tickers eventually earned their name.
U.S. Stock Market Symbols
The US stock exchanges uses letters for ticker symbols. In other stock exchanges in some countries they might use numbers, letters or a combo of both, it all depends on the country.
New York Stock Exchange (NYSE) ticker symbols
Stocks listed on the NYSE have three or less characters, but the majority on the NYSE either have one or two letter symbols.
NYSE Stock Symbol Examples
NASDAQ stock ticker symbols
Companies listed on the NASDAQ typically have four letters.
NASDAQ Stock Symbol Examples
What Else You Should Know About Stock Ticker Symbols
Ticker Symbol Extensions
Sometimes an extra letter or an extension is added behind some stock ticker symbols. These extensions or extra letters are a special code and have a meaning, which categorizes the investment.
For example, some listed companies might issue two share classes, or classes of stock, designated as Class A and Class B. These different classes of stock may have an extra identifier added after a period and may say “.A” or “.B”
If a stock symbol has letters added to it such as .PK, .OB or .OTCBB, this means the stock doesn’t trade on an exchange, but rather it trades in the over-the-counter market. More specifically, a .PK indicates that a stock is now trading on the pink sheets, while an .OB suffix or .OTCBB prefix represents the over-the-counter bulletin board.
Also, an extra letter at the end of a ticker symbol can also mean something is wrong with the company. For example, if a “Q” has been added, this means that a company is in bankruptcy proceedings, and “E” means the company is late on its SEC filings.
Below is a list of fifth symbols on the Nasdaq and what they mean:
A – Class A
B – Class B
D – New issue or reverse split
E – Delinquent in required filings with the SEC
F – Foreign
M – Fourth class of preferred shares
N – Third class preferred of preferred shares
O – Second class preferred of preferred shares
P – First class preferred of preferred shares
Q – Bankruptcy proceedings
X – Mutual Fund