What Is Z?

Z is a Nasdaq stock symbol specifying that a stock is a miscellaneous entity, such as a depositary receipt, stub, additional warrant, or unit. Z is known as a fifth-letter identifier. Nasdaq-listed securities historically had only four characters. If a fifth letter appears, it identifies the issue as different from a single issue of common stock or capital stock.

Key Takeaways

  • Z is a Nasdaq stock symbol indicating that a stock is different from a single issue of common or capital stock.
  • The letter appears in the ticker symbol as a fifth letter identifier. Historically, symbols had four letters.
  • Z might indicate that the issue is a depository receipt, stub, additional warrant, or unit.

Understanding Z

Since 2007, Nasdaq-listed stocks may have as little as one letter in their ticker symbols. However, most Nasdaq-listed stocks have symbols containing four letters that are a close abbreviation of the company's name. "Z" is a fifth-letter identifier. Other identifiers are A or B for class A or class B shares, D for new issues, H for second preferred bonds, and K for non-voting shares.

Each letter of the alphabet has a specific Nasdaq meaning. When a stock has a Z after its ticker symbol, further research is needed to determine why the letter has been added. However, Z historically had a different meaning in futures trading, where it indicated a delivery month of December until new options symbology was introduced in 2010. Z is also the ticker symbol for the home valuation website Zillow.

Nasdaq and Technology

Nasdaq is a global electronic marketplace for buying and selling securities, as well as the benchmark index for U.S. technology stocks. Nasdaq was created by the National Association of Securities Dealers (NASD) to enable investors to trade securities on a computerized, speedy, and transparent system, and commenced operations on February 8, 1971.

The term Nasdaq is also used to refer to the Nasdaq Composite, an index of more than 3,000 stocks listed on the Nasdaq exchange that includes the world’s foremost technology and biotech giants. The Nasdaq computerized trading system was devised as an alternative to the inefficient specialist system, which had been the prevalent model for almost a century. The rapid evolution of technology made the Nasdaq’s electronic trading model the standard for markets worldwide.

As the Nasdaq was a technology trading leader, the world’s technology giants chose to list on the Nasdaq in their early days. As the technology sector grew in prominence in the 1980s and 1990s, the Nasdaq became the most widely followed proxy for this sector. The Nasdaq is a three-tired market.

Nasdaq 3-Tiered Market

The Nasdaq Capital Market is an equity market for small-cap companies. Listing requirements are less stringent than for other Nasdaq markets that list larger companies with significantly higher market capitalization.

The Nasdaq Global Market Composite consists of 1,450 mid-cap stocks that meet Nasdaq's financial and liquidity requirements and corporate governance standards. The Nasdaq Global Select Market Composite is a market capitalization-weighted index made up of 1,200 US-based and international large-cap stocks representing the Global Select Market Composite.