The Origin of the Ticker Symbol

Posted by Neil McIver - McIver Capital Mngmt. at Canaccord

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Stock Ticker

Stock Ticker

The ticker symbol has been synonymous with North American stock markets over time. But have you ever wondered where the term “ticker symbol” comes from?

The origin of the ticker symbol dates back to the end of the 1800s when Thomas Edison developed one of the first means of digital electronic communication — the stock ticker — a machine which broadcast the price of stocks over telegraph lines. It consisted of a long paper strip that ran through the machine which printed company names and their associated stock transaction price and volume information.

The word “ticker” was derived from the tapping noise the machine made while printing. At the time, it was difficult to list the entire name of a company, so an abbreviated form called a “ticker symbol” was used.

In the 1960s, the paper ticker tape and stock ticker become obsolete. At this time, the rise in the use of new technology such as television and computers replaced the ticker tape to transmit financial information.

Today, letter-only ticker symbols have been standardized across North American markets. When a security is listed on public markets, a company has the opportunity of choosing their ticker symbol. There are generally few rules that limit its ticker symbol name, as long as the main part of the symbol is four letters or less, is unique, does not closely resemble another symbol and is not rude in nature.

Some of the more unique ticker symbols include: LUV — a low-cost U.S. airline, headquartered in Love Field, USA; FUN — a U.S. amusement park operator; YUM — a global operator of fastfood restaurant chains; and TAP — a U.S. beer-producer.