| Ticker Symbol | The unique characters used to identify the company. |
| Shares Traded | The volume for the trade being quoted. Abbreviations are K = 1,000, M = 1 million, and B = 1 billion |
| Price Traded | The price per share for the particular trade (the last bid price). |
| Change Direction | Shows whether the stock is trading higher or lower than the previous day's closing price. |
| Change Amount | The difference in price from the previous day's close. |
These quotes will continually scroll across the screen of financial channels or wires throughout the trading day, showing current or slightly delayed data. Often, the ticker will quote only stocks of one exchange, but it is common to see the numbers of two exchanges scrolling across the screen or, indeed, move back and forth among the major exchanges.
You can tell where a stock trades by looking at the number of letters in the ticker symbol. If the symbol has three letters, the stock likely trades on the NYSE. A four-letter symbol indicates the stock likely trades on the Nasdaq. Some Nasdaq stocks have five letters, which usually means the stock is foreign. This is designated by an "F"or "Y"at the end of the stock symbol.
On many tickers, colors are also used to indicate how the stock is trading. Here is the color scheme most platforms use:
Green indicates the stock is trading higher than the previous day's close.
Red indicates the stock is trading lower than the previous day's close.
Blue or white means the stock is unchanged from the previous closing price.
Before 2001, stocks were quoted in fractions, but with the emergence of decimalization, all stocks on the NYSE and Nasdaq use decimals for more precision. The advantage to investors and traders is that decimalization allows investors to enter orders to the penny (as opposed to fractions like 1/16).
Which Quotes Get Priority?
There are literally millions of trades executed on more than thousands of different stocks each trading day. As you can imagine, it's impossible to report every trade on the ticker tape. Quotes are selected according to several factors, including the stocks' volume, magnitude of the price change, how widely they are held, and if there's significant news on the companies.
For example, a stock that trades 10 million shares a day would appear more times on the ticker tape than a stock that trades 50,000 shares a day. Or if a smaller company not usually featured on the ticker has some groundbreaking news, it could be added to the ticker. The only times the quotes are shown in predetermined order are before the trading day starts and after it has finished. At those times, the ticker simply displays the last quote for all stocks in alphabetical order.
How Are Stock Tickers Used?
Stock tickers are used to help investors identify stocks. When placing buy and sell orders, you select the company’s ticker, often an abbreviation of its name rather than its full name.
Tickers serve several purposes. They use fewer characters than the company’s full name, making them ideal for saving space and, more importantly, differentiating similarly named companies or the various shares offered by the same company.
Some companies issue different types of shares, such as preferred stock, common stock, shares with and without voting rights, or shares with more voting rights than others. In these cases, tickers are essential to identify the types of ownership.
For example, Alphabet, the company behind Google, has two tickers. You need to know the difference between GOOGL and GOOG because with the first, you get voting rights, and with the second, you don’t.
Before buying stocks, make sure the ticker you select represents the type of share you want.
Where to Find a Stock Ticker
Company ticker symbols can be found all over the internet. If you search for a company, its ticker or tickers (if it has more than one) should appear. Tickers can also be found on the company's website, searching for the company on the stock exchange platform where it's listed, and on platforms like Investopedia if you don't know the specific exchange.
Some companies have strikingly similar tickers, and some offer more than one type of share. This means you must be very careful to select the correct symbol when trading.
How Are Ticker Symbols Chosen?
Ticker symbols are chosen by companies when they prepare to list their shares on the public market. The ticker must meet the exchange’s criteria and, obviously, not be taken.
What Are Some Well-Known Ticker Symbols?
Every publicly traded stock has a ticker. Here are some well-known ticker symbols:
- AAPL: Apple
- AMZN: Amazon
- BRK.A: Berkshire Hathaway
- GS: Goldman Sachs Group
- TSLA: Tesla
- WMT: Walmart
As you can see, most of these tickers are abbreviations of the company or index's name.
How Long Are Tickers?
Most stock tickers arethree or four letters,although some exchanges may allow fewer or more letters and even permit numbers to be used. For example, a handful of companies, such as Ford, Citigroup, and Visa, are identified with one letter.
In addition, an extra letter might be tacked on at the end to identify the type of share, such as A or B, which can represent class A and class B shares, and P or PRB, which are often used to identify preferred stock.
The Bottom Line
Constantly watching a ticker tape is not the best way to stay informed about the markets. Tick indicators are used to quickly identify those stocks whose last trade was either an uptick or a downtick. They are used to indicate prices and determine any trends. Remember that it can be almost impossible to see the exact price and volume at the precise moment of trading. Think of a ticker tape as providing a general picture of a stock's "current" activity.
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