Learning to interpret stock ticker symbols can be a valuable skill for an investor who wants to carefully track a portfolio or potential investments. Any publicly-traded company is represented by a unique ticker symbol, usually made up of one to five letters. With business television channels often scrolling a stock ticker across the bottom or side of the screen, there may not be time to pause and look up each tidbit that demands further attention. By remembering a few quick tips, however, you can glean information about a company as soon as you see its ticker symbol displayed.
Basic Number of Letters
One of the first facts you can tell from a ticker symbol is the stock exchange on which the company is traded. A ticker symbol of one to three letters, such as C for Citigroup or IBM for International Business Machines, means the company is traded on the New York Stock Exchange. A ticker symbol of four letters, such as AAPL for Apple or MSFT for Microsoft, means the company is traded on the NASDAQ Stock Market. Finally, mutual funds -- which are not actual company stocks but baskets of stocks -- are usually five letters with an X as the fifth letter, as in FMAGX for Fidelity Magellan.
One-Letter Blue Chips
Select companies on the New York Stock Exchange have a one-letter ticker symbol, such as F for Ford Motor Company. This helps them stand out from the pack, and these special tickers are normally reserved for prominent blue chip companies since only 26 are available. Although more of a symbolic honor than a practical measure, these tickers offer a hint of tradition and reliability at a glance. Of course, this is not always the case, as one-letter companies have from time-to-time gone bankrupt or merged out of existence, such as US Airways, once U and now the more common three-letter LCC.
While many companies' stock symbols are basically abbreviations of their names, such as GOOG for Google, other companies have opted for more humorous or witty choices. The hope is that a more memorable symbol is easier for investors to recall. Usually, the symbol has some everyday basis, as in HOG, the popular nickname for the company Harley-Davidson's motorcycles. Other times, a company name fits into three letters, as in GAP for the Gap clothing store -- which changed its ticker when the Great Atlantic & Pacific Tea Company, better known as A&P supermarkets, surrendered the symbol when it filed for bankruptcy protection.
Some stock ticker symbols have suffixes, usually after a slash or period, or represented by a lower-case letter. This may represent shares that trade on an exchange other than the NYSE or NASDAQ. For instance, a ".OB" after a ticker symbol means it is trading on the smaller American OTC exchanges, while a ".L" means the stock trades on the London exchange in England. A slash followed by an "A" or "B" may refer to different share categories, as in BRK/A and BRK/B, two different classes of Berkshire Hathaway. Finally, a "PR" at the end of a symbol or a lower-case "p" within the ticker indicate preferred shares as opposed to common shares.
Eric Strauss spent 12 years as a newspaper copy editor, eventually serving as a deputy business editor at "The Star-Ledger" in New Jersey before transitioning into academic communications. His byline has appeared in several newspapers and websites. Strauss holds a B.A. in creative writing/professional writing and recently earned an M.A. in English literature.