What Is the Difference Between the NYSE & NASDAQ Ticker Symbols?
Stock ticker symbols are used to look up the current price of exchange-traded stocks. In the United States, stock symbols consist of one to five letters. In most cases an investor can quickly tell whether a stock is traded on the NYSE or the NASDAQ, just by looking at the ticker symbol.
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Identification
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Stocks traded on the New York Stock Exchange have stock symbols of one to three letters, such a T for AT&T, GE for General Electric, or IBM.
Stocks that trade on the NASDAQ have four-letter tickers symbols, including AAPL for Apple and GOOG for Google.
History
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The NYSE is the U.S. oldest stock exchange. In its early years, stocks had one- and two-letter ticker symbols, some of which are still in use. As the exchange added stocks, the symbols were expanded to three letters to make more combinations available.
The NASDAQ started in 1971 as a fully electronic stock exchange. The NASDAQ used four-letter ticker symbols to differentiate it from other exchanges. Until 2007, companies that switched exchanges would have to select new ticker symbols with the correct number of letters.
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Regulation
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In 2007, the Securities and Exchange Commission, or SEC, issued regulations that allowed companies to move from the NYSE to the NASDAQ and take their three-letter ticker symbols with them. One- and two-letter symbols still cannot migrate to the NASDAQ.
In 2009, the SEC turned the approval of stock symbols over to the Options Clearing Corp. At the same time, some companies on the NYSE were allowed to change to four-letter ticker symbols. Among the first NYSE companies to get new symbols were Pike Electric, going with PIKE; and Companhia Vale Do Rio Doce, VALE.
Extras
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Both stock exchanges allow the addition of extra letters for special purposes. The NYSE puts a dot or period in front of the extra letters. Examples are .A for class A shares and .B for class B shares.
NASDAQ allows the use of a fifth letter to show special meaning. Additional extra letters that show up regularly on NASDAQ are F for a foreign company and Y to designate American depositary receipts, or ADR.
Expert Insight
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In the modern world of electronic stock trading, most investors do not care where stocks are traded. All buy and sell orders are filled electronically. The Wall Street Journal noted in an article that the new rules will allow companies to select "vanity" ticker symbols that help investors recognize the company and its stock.
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References
Resources
- Photo Credit stock exchange image by Christopher Walker from Fotolia.com
