Investing for Beginners: What is a Stock Ticker Symbol?
Publicly traded companies on the stock market are identified by their stock ticker symbol, which is a unique set of letters, numbers, or both.
Here are two examples of a stock ticker symbol:
Netflix's stock ticker symbol is NFLX
Image credit: NFLX Stock Ticker on Yahoo Finance
Best Buy's stock ticker symbol is BBY
Image credit: Best Buy Stock Ticker on Yahoo Finance
Stock tickers are an identifier of the stock name itself. They also make it easy for you to identify where a stock trades by the number of letters in the stock symbol. For example, a three-letter stock symbol usually trades on the New York Stock Exchange (NYSE). A stock ticker symbol with four to five letters trades on the National Association of Securities Dealers Automated Quotations (Nasdaq). A stock ticker that has five letters typically means that it's a foreign stock.
Here are three examples of a stock ticker symbol on different stock exchanges:
The Apple ticker symbol on the NASDAQ is AAPL.
The Chipotle ticker symbol on the NYSE is CMG.
The foreign stock LVMH Moët Hennessy Louis Vuitton has a ticker of LVMUY.
Publicly traded companies are allowed to trade on several different stock exchanges. However, no two companies will share the same stock ticker symbol on one stock exchange. For example, you wouldn't see Tesla's stock ticker, TSLA, listed twice on the Nasdaq's stock exchange.
If you look up a company using their stock ticker symbol, it will include the following:
A) A market summary of the stock's current price
B) The percentage of the stock's daily price increase or decrease
C) The highest and lowest amount the stock has traded for in a recent 52 week period
D) And more information about a stock's performance
The color of a stock ticker is a key indicator of a stock's performance. The color green indicates that the stock is trading higher (increasing in price) than the previous day's closing price. The color red indicates that the stock is trading lower (decreasing in price) than the previous day's closing price. The colors blue and white mean that a stock's performance is unchanged from the previous day's closing price. In the example above, TSLA was trading 3.50% (or $25.13) higher than its previous day's closing price. This is why the colors representing the change are green.
Before investing in stocks, it is essential to understand the information that is readily available and presented to you as a potential investor. Looking up a stock by its ticker symbol will allow you to access all the information you need to make an informed decision and succeed as a future investor.