Stock Ticker FAQs
The stock ticker is symbolic of all-things financial and serves as a real-time measuring stick for prevailing economic conditions. Still, people that are unfamiliar with the intricacies of the stock market may be unable to understand the distinct language and coding of the stock ticker. Frequently asked questions related to the stock ticker deal with the history of the device and how to read and apply the information.
Other People Are Reading
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History
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The original stock ticker machine printed quotes onto ticker tape from the floor of the New York Stock Exchange via telegraph. Brokerage houses across the country usually had access to one stock ticker-telegraph device, and clerks transcribed the price quote information upon large boards to report prices to customers, by hand.
The advance of communications technology enables investors to attain real time stock market data through television channels or online media, such as CNBC or Bloomberg. Despite the new technology, the historical coding necessary to preserve time and space through the telegraph have been preserved by today's stock ticker readings.
Stock Ticker Symbols
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Ticker symbols identify specific companies and lead each quote string. Frequently traded shares of businesses were abbreviated to save space on the original ticker tape. Single letters represented the names of companies during the early histories of the stock market and the stock ticker telegraph. Today, the number of letters of a stock corresponds with the market upon which it trades---in-line with the chronological opening date of that market.
One and two-letter symbols are associated with shares that trade upon the New York Stock Exchange. Three-letter stock symbols may trade upon the New York Stock Exchange or American Stock Exchange (AMEX). Lastly, four-letter stock symbols are identified with the National Association of Securities Dealers Automated Quotations (NASDAQ).
For example, "T" represents AT&T Corporation, which trades upon the New York Stock Exchange. MSFT, the ticker symbol for Microsoft, trades on the NASDAQ. Additionally, mutual funds are identified with an "X," and stock market indices carry the "$" sign.
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Major Indices
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Stock tickers will frequently flash the readings of the major stock and bond indicators. Stock market indices include the Dow Jones Industrial Average (Ticker: $INDU), Standard and Poors 500 Index (Ticker: $INX) and Nasdaq (Ticker: $COMPX).
Your stock portfolio is likely to be making money when the Dow, S&P 500 and Nasdaq are all up sharply. Specifically, the Dow is composed of 30 large corporations, while the S&P 500 is made up of 500 stocks and the Nasdaq index is tied in closely with the technology economy. These indices are calculated by taking price and market-weighted averages of their components.
The 10-Year Treasury note is government debt. The 10-Year is a benchmark, or comparison standard, for the bond market.
Last Trade Volume and Share Price
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The relatively large number that follows the ticker symbol identifies the volume of the last trade, or the amount of shares that traded hands during the transaction. The last trade volume is before the @ symbol, which precedes the share price of that specific trade. Meaning, 100 @ $50.25, corresponds to 100 shares of stock selling for $50.25 at the last trade.
The quote stream is complete with plus / minus indicators that compare the current advance or decline against the prior session's closing price for the stock.
Additional Information
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You will begin to recognize the ticker symbols of the most actively traded stocks over time. Investors may check the Investing section of the "Wall Street Journal," or perform online searches upon Bloomberg to match stock ticker symbols with underlying corporations to gain more insight for "reading the tape." Still, real time stock quotes may only be useful for technical analysis, which is strictly based upon share price and volume.
Ticker symbols can be entered into various websites for additional valuation information, such as price to earnings ratios and dividend yields. You may also contact corporate investor relations departments for annual reports, which detail the business operations for the particular company, before deciding to invest.
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References
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Comments
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$INX is not SP500 index, it's CBOE internet sector index. SP500 index would be $SPX.
