Reviewed by Aug 27, 2020| Updated on
Ticker symbols are arrangements of symbols or characters that are generally English letters representing specific assets or securities listed on a stock exchange or traded publicly. When a listed firm goes on to issue its securities to the public at a marketplace, it will be asked to choose an available ticker symbol. This symbol is used by the traders and investors to place their orders for transactions.
All listed securities will have a unique ticker symbol. This ticker symbol will facilitate an easy flow of trade orders and transactions across the day-to-day financial transactions.
The Standard and Poor’s (S&P) came up with the modern letter-only ticker symbols in the United States of America in order to give investments a set of benchmarks. Before that, a single solitary firm could have several ticker symbols between various individual financial and stock markets.
The word ‘ticker’ also refers to the sound being made by the ticker tape machinery setup. These ticker-tape machines were widely used in financial firms. They are now substituted or replaced by different kinds of electronic digital tickers. Every stock market has a convention that is formatted to issue tickers particular to that stock market.
Understanding Ticker Symbol
Share or equity symbols are the most widely-known type of ticker symbols. Shares listed and being traded on the exchanges in the United States of America such as the NYSE (New York Stock Exchange) have ticker symbols that don’t exceed three letters.
The shares listed on the NASDAQ have ticker symbols that are of four letters. The ticker symbols offer a unique identifier by which securities can be traded and researched. One thing to note here is that the ticker symbols can be chosen based on the availability.