Stock Symbol

A stock symbol is an abbreviation that refers to a company's share listed on stock exchanges. It is a unique code comprising a set of characters, i.e., letters, numbers, or a combination of both. It is used to distinguish a particular stock from the other securities.

They are also called stock tickers or ticker symbols. Some tickers have additional characters—these letters highlight features like asset class or trading restriction. The compositions and the number of characters present in each symbol vary between different stock exchanges.

• A stock symbol is a code or abbreviation that denotes particular security listed on stock exchanges. It is an arrangement of alphabetic letters, numbers, or both—a unique identity for each company or security.
• It helps investors recognize security issued by a company. In addition, it facilitates placing orders and distinguishing between different asset classes.
• The term “ticker” originates from the sound made by the ticker tape machines. Ticker machines were used extensively in stock exchanges between 1867 and 1960.
• If a ticker name has an additional alphabet "E,” the stock is about to get delisted.

The stock symbol is a unique combination of characters—letters, numbers, or both. It represents particular security belonging to a company. The company should be registered for trading over a stock exchange. The symbol can range from just a single character to even five characters. It is also referred to as a ticker or a ticker symbol. The term “ticker” originates from the sound made by the ticker tape machines.

In the 1800s, share prices were announced with the name of the security or company. However, this process became too tedious as the number of listings increased. The process was amended in 1867 when the ticker-tape machine was invented by Edward Calahan.

The device resembles a telegraph machine. A ticker-tape transformed the signals into characters—alphabetic letters and numbers. The machine recorded characters on ticker tapes and conveyed real-time stock prices to the investors. By the 1960s, ticker tapes became obsolete, but ticker symbols are still in use.

Ticker symbol compositions and the number of characters vary for different stock exchanges. For example, The National Association of Securities Dealers Automated Quotations (NASDAQ) accepts up to five-letter. The New York Stock Exchange (NYSE), on the other hand, allows only up to four digits.

Different stock tickers are as follows:

1. Common Stock Symbols: It is the basic ticker created with three or four letters taken from the company's name. It may even include numbers. NYSE prescribes up to four letters, while NASDAQ allows as many as five characters.
2. Stock Tickers with Modifiers: Many tickers are followed by an additional letter. The additional letter represents the security's asset class, trading restriction, or stockholders' privilege. These modifiers range between A and Z, each denotes a distinct significance. For instance, stocks ending with 'K' don't allow stockholders to vote, while 'Y' is used for an American Depository Receipt (ADR).
3. Creative Stock Symbols: The letters in such a ticker are not taken from the company's name but highlight either a creative side, vision, norms, or a unique selling proposition. By design, these tickers are catchy, clever, and smart.
4. Option Ticker: This ticker represents the underlying stock’s put or call classification. It also conveys the option’s strike price and expiration month. 
5. Mutual Fund Tickers: The symbols for mutual funds may comprise both letters and numbers. Moreover, it ends with the letter "X" so that investors can differentiate between mutual funds and other stocks. Mutual fund tickers typically have five letters and an “X.” The symbol is longer because financial institutions often offer multiple mutual funds with similar names.

Given below is a list of stock symbols that highlights different types of tickers:

When a company issues different securities over the stock exchange, traders struggle to spot a particular stock. When two or more companies have identical names on the stock exchange, it further adds to the chaos. Thankfully, every stock has a unique abbreviation, i.e., a ticker symbol. Traders can track price fluctuations by creating a watchlist comprising ticker symbols.

Also, the letters added at the end of a stock symbol highlight trading restrictions or security class. For example, Tampa stands for Apollo Asset Management Inc. 6.375% Preferred Stock Series A USD25. Similarly, AAMpB denotes the Apollo Asset Management Inc. 6.375% Preferred Stock Series B USD25.

If a ticker name has an additional alphabet "E," it highlights a failure to comply with financial reporting regulations—such companies are about to get delisted from the exchange. However, if the firm completes requirements within set deadlines, the stocks can continue trading in.

This has been a guide to What is a Stock Symbol and its definition. We discuss stock symbol meaning, & types using examples like Apple, Netflix, etc. You can learn more about it from the following articles – 

• Stock Quote
• How to Read a Stock Chart?
• Open Outcry