A ticker is a letter or numeric designation of an asset on the stock exchange. In simple terms, it is a short code that replaces the full name of the security.
Usually, it consists of no more than six characters. It is assigned to different assets: stocks, funds, futures, and so on. Cryptocurrencies also have tickers, but we will not talk about them in this article.
The word has an interesting history. In the middle of the 20th century, the US telegraph used special devices for transmitting stock exchange news — ticker tape machines. Long names of securities slowed down the process, so short symbols were introduced. The abbreviations were standardized and began to be called tickers.
What are tickers for
Let’s look at the main functions.
- Tickers allow you to identify stocks, bonds, and other financial instruments. They help investors and traders easily find information about a specific security.
- They provide standardization in the market, avoiding confusion between companies with similar names.
- Help investors quickly track price changes, trading volumes, and other market information in real time. And they simplify communication between market participants, allowing them to easily reference specific securities in discussions, reports, and news.