A ticker is a unique short code for a stock, bond, index, or another financial instrument. It serves as an identifier within an exchange platform or information system.
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Definition of ticker
A ticker is the short name of an asset containing numbers, letters, or a combination of both, used on an exchange platform. It is publicly traded and is listed on most global stock exchanges. As a rule, a ticker is a combination of Latin characters. For example, the ticker symbol of Apple Inc. stock is AAPL.
The ticker symbol is unique for a particular exchange and is assigned to a specific stock or another exchange-listed instrument. The term most often refers to a specific stock.
History of the ticker
The term originates from the telegraph ticker tape machine used for the transmission of stock exchange information. Long company names slowed down the transmission of stock of quotes, but Edward Callahan, a telegraph operator for the New York Stock Exchange, managed to solve the problem.
Callahan created the first ticker symbol with two letters (a shortened name of the company) followed by a number (the number of shares traded). The combination of symbols was telegraphed and displayed on telegraph machines, which were used for tracking stock prices. Today the ticker system is used by most stock exchanges worldwide and is an important part of the financial industry.
What a ticker indicates
Latin symbols in the ticker are typically an abbreviation of the company’s name. For example, the stock of International Business Machines has the ticker IBM. Sometimes the ticker symbol is simply a consonance with the corporation’s name, for example, AMZN for Amazon stock. There are several US companies whose tickers consist of just one letter: F for the Ford Motor Company, and C for Citigroup Inc.
Some tickers show whether a stock gives its owner voting rights. For example, Berkshire Hathaway Inc. class A and B shares are listed on the NYSE. The ticker of the A class shares is BRK.A, and for the B class shares it is BRK.B. The holders of BRK.B shares have fewer rights.
The tickers for the same company’s stock on different exchanges may be different. Tesla Inc. stock can be found on the Nasdaq under the ticker TSLA, while the same company’s stock goes under the ticker TL0 on the Frankfurt exchange. On Asian exchanges, such as Hong Kong, Shanghai, or Tokyo, the tickers only consist of numbers. For example, the stock of Alibaba Group Holding Ltd is listed on the Hong Kong exchange under the ticker symbol 9988.
How to use a ticker
Ticker symbols are used to identify specific public companies and the shares issued by them. Tickers help to:
- Find the desired financial asset on an exchange platform
- Track stock prices in real-time on financial news sites and stock exchange boards
- Make trades, as tickers are listed on trading orders to identify the specific shares that are bought or sold