What Is a Ticker Symbol?
A ticker symbol is an arrangement of characters—usually letters—representing particular securities listed on an exchange, or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities that investors and traders use to transact orders.
What Is a Ticker Symbol?
History of Ticker Symbols in the U.S.
Standard & Poor's (S&P) developed the modern letter-only ticker symbols in the U.S. to standardize investing. Previously, a single company could have numerous ticker symbols among different individual stock markets. The term "ticker" refers to the noise made by the ticker tape machines, which were once widespread in use, but now have largely been replaced by various types of electronic digital tickers. Each stock market has a formatting convention for the issuance of tickers specific to that stock market.
- A ticker symbol is a selection of letters or other characters that represent certain publicly-traded or listed securities.
- A company picks an unused ticker symbol for its shares when it issues securities to the public marketplace for sale.
- Investors and traders use the ticker symbol to research the security and to place trade orders.
- Every listed security has a unique ticker symbol, facilitating the vast array of trade orders that flow through the financial markets every day.
Ticker Symbol Basics
Stock or equity symbols are the most known type of ticker symbol. Stocks listed and traded on U.S. exchanges such as the New York Stock Exchange (NYSE) have ticker symbols with up to three letters. Nasdaq-listed stocks have four-letter ticker symbols.
The ticker symbol provides a unique identifier by which individual securities can be researched and traded. While the ticker symbol is most commonly an abbreviation of the associated company’s name, it is not a requirement; availability may prevent a company from selecting a symbol that easily translates to its name.
Ticker symbols for options are structured to represent the underlying stock ticker. They are based on the underlying asset, the contract's expiration date, and the contract type, either a put or a call option.
Mutual fund ticker symbols are usually alphanumeric and end with the letter X to differentiate them from stock symbols.
New York Stock Exchange-listed securities have ticker symbols of up to three letters, while Nasdaq-listed stocks have symbols of up to four letters.
Ticker Symbols Followed by E or LF
When a ticker symbol contains the letter "E" on the Nasdaq Stock Market or an "LF" on the NYSE, this indicates the company associated with the stock has fallen behind on its reporting obligations to the Securities and Exchange Commission (SEC). The associated letters add to the end of the company’s normal ticker symbol.
Often, companies have a set grace period to complete their reporting requirements. Once the requirement is met, the extra letters are removed. If the reporting requirement is not met before the end of the grace period, the security may be removed from trading or delisted.
The Stock Ticker
The stock ticker is a digital listing, or character printer, of the current prices for selected securities, displayed in real-time with a very limited delay. Due to the sheer volume of securities in existence, the stock ticker most commonly focuses on those that are trading in large quantities on a particular day and those that have experienced the most notable changes in price.
The stock ticker provides current information regarding the particular market activity. You will see the associated ticker symbol for the security displayed along with information regarding recent trade volume and information on current pricing.
The ticker symbol for Ford Motor Company is F, and the ticker symbol for Facebook is FB. If you don't know the ticker for any particular company, most sites such as Investopedia, Morningstar, and Yahoo Finance have a search box function where you can enter the name of the company.