What is a Ticker in Stock Trading?
Stock prices move around a lot—understanding stock tickers may provide you with crucial information on stock market circumstances and interests.
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What does a stock and a carton of milk have in common?
Well, think of the stock exchange as a supermarket of sorts. 👇
Whenever you think of buying groceries, the supermarket is the first place that comes to mind. You could also get your goods from a corner store, but there is a chance they wouldn’t be able to get you the exact thing you were looking for—or be willing to offer it at a fair price for that matter. For those reasons, the established, well-known, supermarkets (or stock brokers) are seen as much more reliable.
But the world of stock supermarkets may seem perplexing to those of us who don’t know our way around just yet. Finding the right product on your own might prove to be more complicated and time-consuming than you expected, and by the time you find the product you were looking for, the expiration date on it might be running out. ⏳
The key difference here, of course, is that buying spoiled milk probably has a minor impact on your overall budget. Unless you are, by chance, a very passionate dairy enthusiast.
So where do the tickers fit into our hypothetical grocery store?
Well, every security (or ‘stock’) on the market, which we can refer to as a ‘product’ here, has its very own unique price tag, which, despite being susceptible to change, contains meaningful information. Tickers would be, in this case, the price tags, which help us navigate through the vast world of our neighborhood stock supermarket.
So let’s see precisely how stock tickers can help us search through the shelves more easily and get the exact product we want.
- What is a Stock Ticker?
- History of the Stock Ticker
- How to Read a Stock Ticker
- Stock Ticker Types
- Stock Ticker Modifiers
- How Stock Tickers Can Be Confusing
- Conclusion
- Get Started with a Stock Broker
What is a Stock Ticker? 👨🏫
If you’ve ever watched financial news, you may remember those stock numbers and arrows scrolling along the bottom of your screen. These are called real-time stock tickers and they provide us with current information for certain stocks.
Stock tickers typically show us just a fraction of the stocks being traded. Commonly, the tickers we see popping up in the news are usually the most active securities or the securities with the greatest price change from the last day’s trading session.
You could think of a ticker as a live price tag—it records any increases and decreases in the value of security, along with other relevant information, such as trading volume, that shows market conditions and the current interest in our particular product. Moreover, if you focus on stock tickers instead of watching news anchors argue for an hour each day, you’ll probably be better off in terms of long-term financial and mental health.
History of the Stock Ticker 📙
The very first telegraphic ticker tape machine was created, way back in 1867 by Edward Calahan, the employee of the American Telegraph Company—Thomas Edison perfected his invention and patented it four years later. It was developed to show the movement of a stock price on the New York stock exchange, recording it on a narrow tapelike piece of paper.
The term “ticker tape” originated from the sound made by the machine as it was printing. Edison’s ticker machine was used on the stock exchange for several years before being replaced, but it continued to be used until about 1960 for many other purposes, including the transmission of sports scores.
During those times, the term running the numbers was quite literal; messengers would run a circuit between the trading floor and brokerages to provide timely updates on stock prices. As you can imagine, the closer the office to the trading floor on Wall Street was, the more accurate these quotes were, giving a whole new dimension to Benjamin Franklin’s famous aphorism—time is money.
Machines were printing mechanical tickers on paper which made the information exchange more effective. With the progress of technology, that circulation became quicker and closer to real-time and their contemporaries.
The actual first electronic ticker which provided real-time updates wasn’t launched until 1996. This reduced the usage of paper ticker tape to parade purposes only, but the name ticker stuck. The spirit of tape tickers still lives on in its digitized successor, giving us insight into even the smallest of stock market movements and bringing them directly to our screens.
How to Read a Stock Ticker 👷♂️
Reading through a bunch of random numbers and symbols may seem daunting to you at first glance—understandably so—but don’t panic just yet. The key to reading stock tickers is breaking them down into six, more feasible parts, and this short guide will help you to grasp the matter more easily. We will be using a made-up stock ticker of fictional company MONEY as an example. Quite clever, right?
Ticker Symbol (Name) 🏷️
The first part of a ticker is the symbol. It’s a unique combination of letters—and in some cases numbers—that represents specific security. Remember our virtual price tag? Well, this part would be the actual name of the product we are looking for. The number and the allocation of characters, however, varies depending on the exchange security is traded on.
The New York Stock Exchange only allows up to 3 characters and some of the more coveted securities, such as U.S. Steel and Ford, are represented by a single letter. On the other hand, NASDAQ allows for four or five characters—five for foreign companies and they always end with F or Y as their final letter, just like the one in our fictional example.
In Europe, three-letter codes are a standard, whereas, in Asia, numbers are commonly used instead of letters in symbols, to make things easier for foreign investors who mostly use Latin script.
Keep in mind, however, that ticker symbols have to be unique. When a company goes public for the first time, they specify three choices for their symbol just in case. And as you’ve probably guessed, no profanity is allowed when it comes to symbols. They are sometimes adjusted to emulate mergers, when a company changes name or when it delists from its exchange.
While not necessarily a rule, many companies will choose a ticker symbol that relates to their business or brand in some way. For example, Spotify’s SPOT, Snapchat’s SNAP, or Petco’s clever, pun intended choice of WOOF. There are quite a few clever and well-thought-of symbols out there, some of them so catchy that they affected the market.
Trading Volume 📊
The second number in a ticker shows share volume. It can be listed in hundreds (without a suffix), thousands (K), or millions (M).
It shows the number of shares that were traded in the last executed trade. Investors often use this to confirm the continuation or reversal of the trend, may it be a positive or negative one, such as the downward spiral trend on Pyrogenesis in late 2021, for instance.
Latest Price 💵
The number next to it is price traded and represents the price that the last share was bought or sold at. This would be the worth part of our virtual price tag. It is also referred to as “trade value” since it refers to the value of a share in the last trade. Combined with share volume, we can see that the last trade of our fictional stock was executed for 3 million shares at a price of $310.
However, as the stock prices can change in a matter of seconds, the price you see on the ticker could be outdated by the time your trade is initiated. Even though regular investors might not mind this delay much, day traders need much quicker price updates to make their fast-paced strategies work.
Direction and Change Amount 🚀
The arrow stands for change direction. If it’s pointing up, the stock is trading at a higher price than at the close of the day before. If the arrow is pointing down, it is trading at a lower price. As you can see, our fictional company is trending in a good direction.
Closely connected to it is the part that shows us how much the price changed from the previous day’s closing price. It is called “change amount” and it shows an increase or decrease in the price of the security compared to the one at the close of the previous day.
In our example, the change amount is $0.31 and the price traded is $310 which means MONEY was trading at $309.69 at the close of the previous day.
The final ingredient in understanding the stock ticker would be its color. Ticker color is a quick and helpful indicator of price changes. If it’s red, the security is trading at a lower price than the day before. Green, as you’ve probably guessed from our fictional example, means it is trading at a higher rate. Blue and white are equally used to reflect the stagnation in the price of the security.
Stock Ticker Types 🗃
We have covered the basics of reading and understanding our virtual price tags. As we established, every stock exchange has its own set of rules when it comes to the length and the format of its ticker symbols, which is why many variations of stock tickers exist.
However, our virtual supermarket is not limited to just one type of product—our price tags also contain information on the type of product we’re looking at.
As these symbols represent different types of securities, some of them additionally contain modifiers in the form of extra letters or an added letter after the period in the symbol. They are used to denote which type the security belongs to, for example, a mutual fund. It can also tell us about the stock’s type, like if it is a preferred stock—this is worth noting because a stock’s class tells us about shareholder privileges that come with it.
Different classes of shares are created by companies in order to give the management team a higher percentage in the ownership of the company. Thus, buying stocks can still be profitable for the investors, but management maintains control over their decisions. Startup company shares, for example, often come without shareholder privileges by default.
If you are looking to buy stocks, be aware of these subtle differences in symbols as various types of securities may, and often will, have a different worth on the stock market. Now, let’s see how these different types of securities are marked on stock tickers.
Special Stock Ticker Modifiers in the U.S. Stock Market 📃
Although the rulings differ from one stock exchange to another when it comes to ticker symbols, it is useful to broadly understand how they can appear on the market, most notably on NYSE and NASDAQ.
And that’s where knowing your ticker modifiers comes into play if you are looking to trade in the U.S. stock markets.
Most of the variation in stock tickers is caused by modifiers, many of which apply only to quotations directly from stock exchanges. In practice, as a non-professional investor, you won’t be likely to see them.
As for the ones that you are more likely to encounter, as well as the ones that will most likely help you navigate the stock market, we’ve got you covered. Here are some of the most frequent and potentially useful modifiers in the U.S. stock markets. You should think of them as pro tips of sorts, as knowing them by heart is not necessary:
| Stock Ticker Modifier | Explanation |
|---|---|
| A | Used for Class A shares, which come with certain shareholder privileges and rights. |
| B | Used for Class B shares which have fewer privileges than Class A stock—They are priced to be affordable to individual investors. |
| F | Used for companies listed on foreign exchanges. |
| P | Used for preferred shares. These come with a guaranteed dividend which can increase a stock’s price and liquidity. |
| Q | Used by the company that filed for bankruptcy protection. |
| W | Used for warrants to buy stock. Sometimes it appears as WS rather than W, but essentially, they have the same meaning. |
| X | Used for mutual funds. |
| Y | Used for stocks that trade as American Depository Receipts. These stocks trade on foreign exchanges, but ADR converts currency to dollars for U.S. traders, allowing them to trade on U.S. exchanges. |
A couple of not-so-frequent modifiers worth mentioning include:
OB – Stands for over-the-counter(OTC) bulletin board. It signifies the stock that is being traded in the OTC market.
PK – Short for pink sheets, these are identical to OTC. These securities trade on broker networks and not on major exchanges. The name originated from actual pink sheets of paper which they initially relied on.
SC – This shows that the company is being traded on the NASDAQ capital markets exchange. This exchange is not that vast and has more flexible listing requirements.
How Stock Tickers Can Be Confusing 🤔
We’ve covered most of what you need to know about stock tickers and their variations. They can be a very useful tool to get you an insight on popular stocks on the market and their trending.
But just as the stock market is susceptible to change, tickers are as well—so much, in fact, that it can cause a lot of confusion to those who don’t pay close attention to where their money goes. Entering the wrong ticker symbol while making a trade can be a costly mistake.
One of the more recent examples of such confusion was when a relatively small company named Zoom technologies (ZTNO) was confused with Zoom Video Communications (ZM). Both of these are in the communications technology sector, and their names are similar, but the companies have nothing to do with each other otherwise.
Be that as it may, ZTNO’s stock price skyrocketed after people mistakenly started buying it instead of ZM during the early days of COVID-19 lockdowns. By the time the SEC stopped trades of the stock due to concerns over investor confusion, it was too late as many people had already given in to the herd investing.
OK, so this is very random and uncommon, but here is another example:
Facebook’s name change to Meta in the late October of 2021. led to a 30% soar in prices of the Canadian company Meta Materials Inc (MMAT) and all this before newborn Meta Platforms Inc, even changed its old Symbol (FB) to the new one (MVRS).
Is it a meme play or just an overall confusion? We cannot say for certain, but if you want to buy stock, it pays to know a company’s stock ticker and double-check this before making trades, since many ticker names are similar.
Sometimes a single character in the ticker symbol can define the type of security you’re trading with. Google (Alphabet Inc.) for instance has two share classes on NASDAQ— GOOG which designates common shareholders, with no voting rights, and GOOGL for preferred shares, with voting rights.
Conclusion 🚩
So how useful it is to know how to comprehend your virtual price tags when entering the monumental stock supermarket?
Knowing the ticker symbols allows you to access financial data about a company you will potentially invest in easily—stock tickers can help you look to track down specific companies or funds while avoiding confusion that occurs if they have similar names. In that regard, understanding modifiers are also very useful, but optional knowledge.
The best way to put all of the knowledge to use is certainly practice. Use this info the next time you see a ticker and you’ll have it figured out in no time
The longer you invest, the easier it will be for you to memorize the stock tickers of your beloved securities—this will make tracking the outcome of your investments a lot smoother and less time-consuming. You will know exactly where to look among the shelves to find the product you were looking for and swoop down on it when the time is optimal or sell it as the expiration date runs out.
Ticker in Stocks: FAQs
-
What Do Stock Numbers Mean?
Stock numbers give us insight into the number of shares in the last executed trade, the price that the share was traded at, as well as the price change compared to the closing price of the previous day.
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How Do I Get a Ticker Symbol for My Company?
To apply for your own sock ticker symbol, you need to fill and submit the required form on the website of the stock exchange you want to get into. The usual response time is between 48-72 hours.
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How Do You Find the Ticker of a Stock?
To find a ticker of a particular stock, you can go to a financial news site like the portal of your desired stock exchange. However, the easiest way to track your stocks is to get one of the top stock trading apps, and set up a watchlist that will display the ticker data of all your favorite stocks.
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Should I Do Anything If My Stock Tickers Change?
Changes to company symbols will not affect you as your trading platform automatically updates your stock portfolio when such changes occur, so you won’t have to do anything about it in that regard.
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Can the Change of Stock Tickers Affect the Value of My Investments?
In theory, yes—the company rebranding can be often interpreted positively by stockholders, as a sign of change in their strategy. Although in reality, it might not actually affect their order of business, this sometimes leads to a slight increase in their value, like in the case of Facebook’s rebranding.
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What is the Best Real-Time Stock Ticker?
There are a couple of really good stock tickers out there, differing in the subscription fee, various customization options, and technical indicators. Platforms such as TradingView, Yahoo! Finance, and Google Finance are free to use, and are considered to be top tier in terms of their accuracy and user-friendliness.
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All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on tokenist.com. Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.
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