Ticker Symbol
Candlefocus EditorAt the heart of a ticker symbol is the company name. A company's name typically gives investors the first clue to the underlying business. For instance, Home Depot stocks the ticker symbol HD on the NYSE, Amazon has AMZN, and Goldman Sachs has GS.
Ticker symbols are also used to identify market indexes such as the S&P 500 Index, or the Dow Jones Industrial Average. These ticker symbols don't reflect a specific company, but instead the average performance of a set of large, publicly traded companies. For instance, the S&P 500 has the symbol SPX, and the Dow Jones Industrial Average has DJIA.
Not all stock symbols are unique, as multiple companies might use the same symbol. This occurs when two or more publicly-traded companies merge or acquire one another and because the same stock may be both listed and over-the-counter (OTC) traded. To differentiate between such companies and the markets in which their stocks are listed, stock symbols may include additional lettering for free and restricted securities, or for different share classes. A company may issue multiple classes of stock, and in such cases, the raised extra letters are used to indicate each class.
In addition, symbols that include a period indicate that the stock is an over-the-counter security that trades on the pink sheets, under the symbol without the period. These are usually companies that have not met the listing requirements of a major stock exchange or have been de-listed.
Financial news organizations use the ticker symbol to identify markets and securities, so investors can easily keep track of the stocks they're monitoring. Market indexes and many brokers now also provide streaming financial news to track and analyze media events and their impact on stock prices.
In short, the ticker symbol is a key piece of information used by investors and traders to quickly identify a particular security and make sense of news related to its performance. It offers an easy way for them to keep track of the investment, whether being actively traded or simply tracked.