WHAT IS XRT
XRT is an extension printed after the ticker symbol for a stock to indicate that the stock is trading on an ex-rights basis. Ex-rights means that the buyer of the stock does not have rights to purchase more shares at a lower price anymore, as those rights have expired. XRT is printed on the ticker tape or displayed on the electronic ticker for clarity and to avoid disputes or confusion about where the rights currently remain. XRT is an abbreviation for the word ex-rights.
XRT is also the ticker symbol for the SPDR S&P Retail exchange-traded fund (ETF). This is an index fund that tracks a broad-based, equal-weighted index of U.S. retail industry stocks.
BREAKING DOWN XRT
XRT is a symbol added as an extension to the ticker symbol for a stock that is trading ex-rights. On the ticker, the extension is added after a dot after the ticker symbol. For example, a trade of stock Apex Borax Company with the ticker symbol ABC that is ex-rights would display as ABC.XRT on the ticker.
Rights are another form of financial instrument, one that gives the purchaser of a stock the right to purchase more shares at a lower price than the trading price, for the first month or two after the initial purchase. It is said that rights are "attached" to a stock, although in some cases these rights are detachable. After that specified initial time period in which the rights are attached, those rights expire, and the stock is said to be traded "ex-rights." When a stock hits the rights expiration period and goes ex-rights, it usually trades for lower than it has been for a brief period of time, because the beneficial rights are no longer attached to it.
The Function of Rights
The function of attaching rights to a stock is to facilitate buyers maintaining their position in the stock if the stock issues more shares not long after the buyer purchases. It functions similarly to the way a price guarantee does for the purchase of a retail product, in which the purchaser does not need to worry that the price of a product will skyrocket, because the price is guaranteed for a certain period of time. This is the reason the price of the stock goes down when the rights expire, because there is no longer a guarantee that the purchaser can maintain an ownership percentage at the same price. This makes the stock less valuable to the purchaser.