If you’re a beginning investor, market reports may seem like a confusing alphabet stew: ROI, NASDAQ, DJIA, ETF and CMOs all serve as shorthand to refer to big ideas that investors use. Once you study up and learn the basic acronyms, you can turn your attention to a whole other – and much larger – class of abbreviations: stock ticker symbols.
A stock ticker symbol is a shorthand way to refer to a company when buying and selling stock. You can look stock ticker symbols up through investor information sites or your favorite brokerage.
Stock Ticker Symbol Definition
Each publicly traded company receives a unique stock ticker symbol before its shares begin trading. A ticker symbol consists of one-to-five letters, depending upon where the stocks are traded. Stocks traded on the New York Stock Exchange or American Stock Exchange typically have between one and three letters, while those traded on NASDAQ may have one-to-five letters. Because ticker symbols are unique to their companies within the market, they serve to identify stocks with accuracy.
The name comes from the stock market ticker machines once used to physically print out stock prices on a long string of paper tape. Nowadays, you may still see them in the scrolling lists of stock market quotes on the edge of the screen on some financial news shows.
Why Use Ticker Symbols?
Ticker symbols provide a uniformity and brevity to companies that their official names usually don’t provide. For example, American Cyanamid, a lengthy corporate name, trades using the ticker symbols ACY and ACYA. This provides a measure of uniformity and saves space when stock prices are listed in a tabular format, on a bottom-of-screen crawler or an old-fashioned stock ticker that printed real-time quotes on paper ticker tape. While ticker symbols may make scanning prices difficult to beginning investors, they’re a handy shorthand for seasoned ones.
Stock lookup sites like Yahoo Finance and Google Finance – as well as those provided online by various brokerages and financial news sites – often allow you to search for stocks by ticker. You can quickly see how various stocks are performing by entering their ticker symbols. If you're using ticker symbols to purchase or sell shares of stock, make sure to verify that you have the right companies before executing your trade.
Extra Letters on Ticker Symbols
In addition to the three- or four-letter stock ticker code, an additional letter or group of letters may be attached to company’s ticker code like a suffix. These codes serve to identify that the price quoted isn’t the regular price for common stock, that the company is in bankruptcy proceedings or that it failed to file all the regulatory paperwork required.
These ticker code suffixes vary among indexes, and investors must learn the codes for each market. Check the market's website or the investor relations page for a particular company for details on what special notations in a ticker symbol might mean.
Researching Ticker Symbols
If you’re only investing in a handful of companies, you’ll probably end up memorizing their ticker symbols by default. If you’re a more active investor, however, you may deal with hundreds of stocks at once, making memorization difficult to keep track of. Several databases provide “translations” of stock ticker symbols, while Google offers basic information when you search with an operand of ticker: and the ticker symbol.
Wilhelm Schnotz has worked as a freelance writer since 1998, covering arts and entertainment, culture and financial stories for a variety of consumer publications. His work has appeared in dozens of print titles, including "TV Guide" and "The Dallas Observer." Schnotz holds a Bachelor of Arts in journalism from Colorado State University.