DEFINITION of 'Ticker Tape'
A ticker tape is a device that shows stock symbols and numbers to convey information about trades. The ticker tape is electronic today, but gets its name from the ticking sound the original mechanical machine made and from the long, narrow pieces of paper that stock quotes were printed on.
BREAKING DOWN 'Ticker Tape'
Each entry on the ticker tape displays the stock symbol (indicating which company’s stock has been traded), volume (number of shares traded), the price per share at which the trade was executed, an up or down triangle showing whether that price is above or below the previous trading day’s closing price and another number telling how much higher or lower that trade’s price was than the last closing price. Electronic ticker tapes also use green to indicate a higher trading price and red to indicate a lower price, and blue or white to indicate no change. Before 2001, trading prices were displayed in fractions, but since 2001, all prices are shown in decimals.
Watching the ticker tape, especially one that is color coded, can help investors gauge overall market sentiment at any moment. Ticker-tape data also helps technical analysts evaluate stock behavior using charts.
Before information could be transmitted electronically, brokers whose offices were closer to the stock exchange had an advantage because they received the latest trading data sooner than brokers located further away. Surprisingly, the real-time electronic ticker did not level the playing field until 1996; earlier tickers, even electronic ones, had delays of 15 to 20 minutes or more.
The first telegraphic ticker tape was released by Edward Calahan in 1867. Edison improved upon Calahan’s invention and patented it in 1871. Mechanical ticker tapes gave way to electronic ones in the 1960s.
Read more about ticker tapes here: Understanding the Ticker Tape.