Ticker symbol:
A stock symbol or ticker symbol is a mnemonic used to uniquely identify publicly-traded shares of a corporation on a particular stock market. A stock symbol may consist of letters, numbers or a combination of both. The word "ticker" used to mean "ticker symbol" is specific to U.S. stock symbols.
[edit] U.S stock symbol history
In the United States, modern letter-only ticker symbols were developed by Standard & Poor's (S&P) to bring a national standard to investing. Previously, a single company could have many different ticker symbols as they varied between the dozens of individual stock markets. The term ticker refers to the noise made by the ticker tape machines once widely used by stock exchanges.
The S&P system was later standardized by the securities industry and modified as years passed. Stock symbols for preferred stock have not been standardized.[1]
[edit] Examples of U.S. stock symbols
Formerly, a glance at a U.S. stock symbol and its appended codes would allow an investor to determine where a stock trades; however in July 2007, the SEC approved a rule change allowing companies moving from the New York Stock Exchange to the Nasdaq to retain their three letter symbols; The DirecTV Group was one of the first companies to make this move. When first implemented, the rule change did not apply to companies with one or two letter symbols,[2] but subsequently any stock was able to move from the NYSE to the Nasdaq without changing its symbol. CA, Inc., which trades under the symbol CA, moved from the NYSE to the Nasdaq in April 2008 and kept its two-letter symbol. [3]
[edit] Single-letter ticker symbols
[edit] Interpreting the symbol
Stock symbols are unique identifiers assigned to each security traded on a market. Some companies use a well-known product as their ticker symbol. Anheuser-Busch, the brewer of Budweiser beer, uses "BUD" as its three-letter ticker, symbolising its premier product, while rival Molson Coors Brewing Company uses a similarly beer-related symbol, "TAP." Genentech uses the symbol "DNA," relating to their biochemical research, while Southwest Airlines pays tribute to its headquarters at Love Field in Dallas through its "LUV" symbol. Cedar Fair Entertainment Company, which operates large amusement parks in the United States, uses "FUN" as their symbol, while Steinway Musical Instruments uses the symbol "LVB", to honor composer and pianist Ludwig van Beethoven. The company that owns Taco Bell, KFC, Pizza Hut and Long John Silver's uses the symbol "YUM." Maritrans (purchased in 2006 by Overseas Shipbuilding Group) used the symbol "TUG." Starting August 27, 2007, Sun Microsystems uses the symbol "JAVA" for its Java programming language.
Prior to the 1999 merger with Mobil Oil, Exxon used a phonetic spelling of the company "XON" as its ticker symbol. The symbol of the firm after the merger was "XOM". AT&T's ticker symbol is simply "T"; accordingly, the company is referred to simply as "Telephone" on Wall Street (the T symbol is so well-known that when the company was purchased by SBC, it took the AT&T name, capitalizing on its history and keeping the desired single letter symbol).
After Hewlett-Packard merged with Compaq computer, the new firm took on the ticker symbol "HPQ". (The former firms were HWP and CPQ.)
[edit] United Kingdom
In the United Kingdom, prior to 1996, stock codes were known as EPICs, named after the London Stock Exchange's Exchange Price Information Computer (e.g.: "MKS" for Marks and Spencer). Following the introduction of the Sequence trading platform in 1996 EPICs were renamed Tradable Instrument Display Mnemonics (TIDM), but they are still widely referred to as EPICs. Stocks can also be identified using their Stock Exchange Daily Official List (SEDOL) number.
[edit] International
Stock symbols are indispensable for stock market work in non-European countries. In countries where Arabic script is used, and in East Asia, translated Roman script versions of company names may be confusing to an unpracticed Western reader; stock symbols provide a simple means of clear communication in the workplace. Many Asian countries use numerical or alphanumerical ticker symbols instead of characters to facilitate international trade.
- Industrial and Commercial Bank of China - 1398.HK [Hong Kong]
- HSBC - 0005 [Hong Kong]
- DBS Bank - D05 [Singapore]
- Jardine C&C - C07 [Singapore]
- TonenGeneral Sekiyu KK - 5012 [Japan]
- Toshiba Corp - 6502 [Japan]
- China CITIC Bank Corp Ltd - 601998 [Shanghai - China]
- Hubei Golden Ring Co Ltd - 000615 -Shenzhen - China]
- ASUSTEK - 2357 [Taiwan]
- Chunghwa Telecom Co Ltd - 2412 [Taiwan]
The most prevalent standard used for international trade is the International Securities Identifying Number (ISIN). An ISIN uniquely identifies a security. Its structure is defined in ISO 6166. Securities for which ISINs are issued include bonds, commercial paper, equities and warrants. The ISIN code is a 12-character alpha-numerical code that does not contain information characterizing financial instruments but serves for uniform identification of a security at trading and settlement.
Securities with which ISINs can be used include debt securities, shares, options, derivatives and futures. The ISIN identifies the security, not the exchange (if any) on which it trades; it is not a ticker symbol. For instance, Daimler AG stock trades on twenty-two different stock exchanges worldwide, and is priced in five different currencies; it has the same ISIN on each, though not the same ticker symbol. ISIN cannot specify a particular trade in this case, and another identifier, typically the three-letter exchange code, will have to be specified in addition to the ISIN. The SEDOL board of the London Stock Exchange is currently revising their own standards to address this issue.
[edit] See also
[edit] References
- Eckett, Stephen (ed.) (2004). The UK Stock Market Almanac 2005. Petersfield: Harriman House. ISBN 1-897597-46-0.
[edit] External links
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