About Stock Market Ticker Symbols
A stock market ticker symbol is a series of letters identifying a publicly traded security. The ticker often is a logical or creative abbreviation for the company, such as Q for Qwest, KO for Coca-Cola, WAG for Walgreen's and MSFT for Microsoft. Company owners choose an available symbol when they first begin issuing stock to the public.
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Identification
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New York Stock Exchange securities use one, two or three letters. Stocks on the American Stock Exchange have three letters, and those with four letters, or occasionally five, trade on the National Association of Securities Dealers Automated Quotation system, or NASDAQ.
History
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Stock symbols are called ticker symbols because of the way the system originated in the 1800s. After Samuel Morse invented the telegraph, stock trade information was transmitted throughout the day instead of just at market close, and abbreviated symbols were chosen because the telegraph had narrow bandwidth. Businesses could save money by sending as few letters as possible to designate the company name. Early stock price machines slowly printed the price changes on a narrow strip of paper and the printing sounded like ticking. People began calling the paper a ticker tape, and the price movements "ticks."
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Features
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People still call upward price movements upticks and downward moves downticks, even though the ticker tape is now electronic and runs across the bottom of news and financial television channels. This electronic feed still displays ticker symbols for the best use of space. People can match ticker symbols with company names at websites offering quotes and other stock market information. See the Resources section below for a couple of options.
Considerations
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A company can choose an older stock market ticker if it becomes available again, even if the symbol has long been identified with a different company. In January 2009, for instance, Merrill Lynch became part of Bank of America, leaving its symbol MER up for grabs. In 1998, Citigroup claimed the letter C, which had long been used by Chrysler, which had recently merged with Daimler and their new symbol was DCX.
Significance
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A company abbreviation and its corresponding stock market ticker symbol can become more identified with the company than its actual name. One particular corporation, for instance, is much more recognized as IBM than as International Business Machines. Another example is the former Minnesota Mining and Manufacturing Company with the ticker symbol MMM. This company became so commonly referred to as 3M by Wall Street and then by the general public, that owners officially changed its name to 3M in 2002.
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