What Is a Stock (Ticker) Symbol?
A stock symbol is a unique series of letters assigned to a security for trading purposes. New York Stock Exchange (NYSE) and American Stock Exchange (AMEX) listed stocks have three characters or less. Nasdaq-listed securities have four or five characters.
Symbols are just a shorthand way of describing a company's stock, so there is no significant difference between those that have three letters and those that have four or five. Stock symbols are also known as "ticker symbols."
Understanding Stock Symbols
In the 1800s, when modern stock exchanges came into being, floor traders had to communicate the stock price of a traded company by writing or shouting out the name of the company in full. As the number of publicly traded companies increased from the dozens to the hundreds, they soon realized that this process was time-consuming and held up the information queue, unable to keep up with frequently-changing prices – especially after the advent of the stock-quoting ticker tape machine in 1867. To be more efficient in relaying price changes on company stock to investors, company names were shortened to one to five alpha symbols. Today, stock tickers still exist, but digital displays have replaced paper ticker tape.
In addition to saving time and capturing a specific stock price at the right time, stock symbols are useful when two or more companies have similar monikers. For example, CIT Group Inc. and Citigroup Inc. have nearly identical names. but are not affiliated with each other: The former is a financial holding company, and the latter is a financial services and investment banking firm. An investor who wants to purchase shares in one would find it easier to know the stock symbol of the company he is interested in. In this case, both firms trade on the NYSE with the ticker symbols ‘CIT’ for CIT Group Inc. and ‘C’ for Citigroup Inc.
There are also companies that are spin-offs of the same company and have similar stock symbols. In November 2015, Hewlett-Packard split into two separate companies – Hewlett-Packard Enterprise and HP Inc. Hewlett-Packard Enterprise, with stock symbol HPE, serves as the business service and hardware division and focuses on servers, storage, networking, and security. HP Inc. is the consumer-facing computer and printer division and has a smaller market for its products than HPE. An investor looking to purchase shares of a company should conduct his or her due diligence to ensure that s/he has the right stock symbol for the right company division.
- A stock symbol is an arrangement of characters—usually, letters—representing particular securities listed or traded publicly on an exchange.
- When a company issues securities to the public marketplace, it selects an available symbol for its shares, often related to its company name.
- Investors and traders use the symbol to place trade orders.
- Additional letters added to stock symbols denote additional characteristics such as share class or trading restrictions.
Share Class Symbols
If the company has more than one class of shares trading in the market, then it will have the class added to its suffix. If it is a preferred stock, the letters "PR" and the letter denoting the class will typically be added. For example, a fictional preferred stock called Cory's Tequila Corporate Preferred A-shares would have a symbol such as CTC.PR.A. Different sources quote preferred shares in slightly different ways. For example, Bank of America common shares trade with the stock symbol BAC. The Bank of America non-cumulative preferred Series D share will be quoted as BAC-PD on Yahoo! Finance, BAC-D on S&P, BACPRD on NYSE, BAC+D on Charles Schwab, BACpD on E-Trade, BAC.PD on Marketwatch, BAC_PD on Vanguard, and BAC/PD on Bloomberg.
Some stock symbols indicate whether the shares of a company have voting rights, especially if the company has more than one class of shares trading in the market. For example, Alphabet Inc. (formerly Google) has two classes of shares trading on the Nasdaq with stock symbols GOOG and GOOGL. Common shareholders of GOOG have no voting rights since GOOG shares are Class C shares, while GOOGL shares are Class A shares and have one vote each. For example, Berkshire Hathaway has two class of shares trading on the NYSE, Class A and Class B. Class A shares are listed with stock symbol BRK.A, and Class B shares, which have lower voting rights than Class A trade with the symbol BRK.B.
Companies trading on the NYSE typically have three or fewer letters representing their stock symbols. Nasdaq firms generally have four- or five-letter symbols, e.g. Adobe Systems (ADBE), Apple, Inc. (AAPL), Alphabet Inc. (GOOG or GOOGL) and Groupon Inc. (GRPN). Some companies that trade on the Nasdaq with fewer than four letters include Facebook (FB) and Moneygram International (MGI). However, companies moving from the NYSE to Nasdaq can retain their stock symbols.
Additional Symbols and Trading Status
Stock symbols are also used to convey information about the trading status of a company. This information is usually represented on the NYSE by one letter following a dot after the stock’s standard company symbol.
On the Nasdaq, a fifth letter is added to stocks that are delinquent in certain exchange requirements: for example, ACERW – the first four letters is the stock symbol for Acer Therapeutics Inc. (ACER) and the last letter ‘W’ indicates that the shares have warrants attached. A company that is in bankruptcy proceedings will have a Q after its symbol, and a non-U.S. company trading in the U.S. financial markets will have the letter Y following its ticker symbol. The meaning of the letters from A to Z are shown here:
- A – Class A shares, e.g BRK.A
- B – Class B shares, e.g. BRK.B
- C – Issuer Qualification Exception – Company does not meet all the exchange’s listing requirements but can remain listed on the exchange for a short time period.
- D – New issue of existing stock
- E – Delinquent or missed one or more SEC required filings (may also be denoted by .LF)
- F – Foreign issue
- G – First convertible bond
- H – Second convertible bond
- I – Third convertible bond
- J – Voting share
- K – Non-voting share
- L – Miscellaneous, e.g. foreign preferred, third class of warrants, preferred when-issued, fifth class preferred shares, etc.
- M – Fourth class preferred shares
- N – Third class preferred shares
- O – Second class preferred shares
- P – First class preferred shares
- Q – In bankruptcy proceedings
- R – Rights
- S – Shares of beneficial interest
- T – With warrants or with rights
- U – Units
- V – When-issued and when-distributed. These shares are about to go through a corporate action plan that has already been announced, such as a stock split.
- W – Warrants
- X – Mutual Funds
- Y – American Depository Receipt (ADR)
- Z – Miscellaneous situations (same as the letter L)
- OB – over-the-counter bulletin board
- PK – Pink sheets stock
- SC – Nasdaq SmallCap
- NM – Nasdaq National Market
- Investors should carry out due diligence on stocks that have the following letters – C, E, L, Q, V, Z – after the ticker symbols before buying shares in the companies.
Real World Example
The ticker symbol for Ford Motor Company is 'F', and the ticker symbol for Facebook is 'FB'. If you don't know the ticker for any particular company, most sites such as Investopedia, Morningstar, and Yahoo Finance have a search box function where you can enter the name of the company.