Stocks found on the
New York and
American Stock Exchange will normally have symbols with three letters or fewer. On the other hand, stocks on the
Nasdaq have four letters. 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.
You should watch out, however, when extra letters are added as a suffix to the stock symbol. This happens for many different reasons, including the following:
- 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.
- If the company has more than one type of common stock currently trading, then it will have the class added to its suffix. For instance, Berkshire Hathaway comes in two forms: BRK.A and BRK.B.
- If a stock is trading on the pink sheets or the over-the-counter bulletin board, a "PK" or "OB" will be added to the stock symbol.
- On the Nasdaq, a fifth symbol is added to stocks that are delinquent in certain exchange requirements. For example, the letter "Q" will be added to the stock symbol of a company in bankruptcy proceedings.
For more insight, read
Understanding The Ticker Tape.
