Key Takeaways
  • A stock ticker symbol is a combination of unique letters, numbers, or both that helps identify a publicly-traded company.
  • Stock tickers allow current and potential investors to identify publicly-traded companies on stock exchanges.
  • The color of the stock’s ticker can represent how well or poorly a publicly-traded company is performing in real-time.
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What is a Stock Ticker?


Publicly- traded companies on the stock market are identified by their stock ticker symbol, which is a unique set of letters, numbers, or both. You can read stock companies and stock prices by identifying their symbols. Some examples are Netflix, which trades on the NASDAQ, as NFLX. Another example is Best Buy, which trades on the New York Stock Exchange (NYSE) as BBY.


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Image credit: NFLX Stock Ticker on Yahoo Finance


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Image credit: Best Buy Stock Ticker on Yahoo Finance


The History of Stock Ticker Symbols


In 1867, Edward A. Calahan invented the first ticker tape machine. The machine was eventually upgraded by Thomas Edison.


In the 19th-century, ticker tape machines were used to print stock symbols and stock information on a ticker tape. The information on this tape included trades and prices, which were transmitted over a telegraph wire. 


These machines would make ticking sounds when printing long and narrow pieces of paper with stock quotes. Eventually, stock symbols and information became available digitally, without ticking sounds. However, the stock ticker kept its original name due to the original ticking sounds. 


Identifying Stock Tickers


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). Therefore, if you know that Best Buy’s symbol is BBY, you can likely identify which exchange it is traded on.


A stock symbol with four to five letters trades on the National Association of Securities Dealers Automated Quotations (NASDAQ). A ticker with five letters typically means that it's a foreign stock. 


Examples of stock ticker symbols on different stock exchanges are Apple and Chipotle. Apple trades on the NASDAQ as AAPL, while Chipotle trades on the NYSE as CMG. One example of a foreign stock is LVMH Moët Hennessy Louis Vuitton, which has a ticker of LVMUY.


Image credit: dennizn / Shutterstock.com


Additional Stock Information


Publicly traded companies are allowed to trade on several different stock exchanges. However,  no two companies will share the same stock symbol on one stock exchange. So, for example, you wouldn't see Tesla's stock ticker, which is TSLA, listed twice on NASDAQ's stock exchange. However, you may see TSLA on both the NASDAQ exchange and the Cboe EDGX exchange.


If you look up a company using its ticker symbol, it will include a market summary of the stock's current price and the percentage of the stock’s daily price increase or decrease. The summary, as shown below, will also include the highest and lowest amount the stock has traded for in a recent 52 week period and any additional information about a stock's performance.


Below is Tesla's (TSLA) Stock Information on Yahoo Finance.


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Image credit: Tesla, Inc. on Yahoo Finance


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. The colors representing the change are colored in green.


Research Your Investments


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 stock symbol will allow you to access all the information you need to make an informed decision and succeed as a future investor. 


Some of the key information displayed when looking up a stock symbol is the number of shares traded, the price it is trading in, and the change in direction and amount in USD. As shown above, these key metrics can help investors understand how well each individual stock is performing at any given time.


Understanding why prices fluctuate is also important. As an investor, knowing how to identify stocks by their stock symbol will help you understand the information presented to you about the company. In addition, understanding information such as market cap, EPS, and recent stock splits may also help you make intelligent decisions as an investor.


An important part of building wealth is investing your money. First, however, it is important to understand where you are investing your money and diversify your investments to lower your portfolio risk. Learning how to read financial information, including stock ticker symbols and summaries, will help you build a strong investment portfolio and build wealth long-term.


Recommended Read: Market Capitalization | Understanding the Stock Market


What questions do you have about analyzing stock information? Please share your thoughts with us in the comment section below.

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