The letters beside a stock name are very important as they identify companies' shares, but what exactly is a ticker symbol?
A ticker, or stock symbol, is a unique 3, 4 or 5 letter abbreviation assigned to every public company for identification purposes. All tickers use only capital letters.
Think of tickers as nicknames. Sometimes, they can be exactly the same as the brand name - like IBM.
Sometimes they can even be clever - Like Anheuser-Busch choosing the ticker symbol BUD or Harley Davidson going with HOG.
A 2007 academic study actually showed that stocks with creative ticker symbols tend to have higher returns than the overall market!
Stocks traded on the New York Stock Exchange have symbols with up to three letters - like T (AT&T), DO (Diamond Offshore Drilling) and LUV (Southwest Airlines).
Stocks traded on the NASDAQ usually have four-letter symbols - like MSFT (Microsoft).
If you see a five-letter ticker symbol that ends with the letter X, that is how you can automatically recognize a mutual fund - like UUPIX (for Profunds UltraEmerging Markets). Beware that mutual funds don't actually trade on any exchange the way stocks do, though.
A ticker symbol is:
- A 3, 4, or 5 letter abbreviation that easily identifies every public company.
- Stocks traded on the NYSE have symbols with up to 3 letters, like MA (Mastercard).
- Stocks traded on the NASDAQ have symbols with 4 letters, like MSFT (Microsoft).
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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read ourfull disclosure policy here.
