Stock tickers on the stock market

In stock exchange news, in trading terminals and on stock exchange websites, abbreviated company names - stock tickers - are often found. What do they mean and why are they invented?

What is a stock ticker on the stock exchange?

As a rule, this combination of letters represents the name of a company, stock index or any other stock exchange assets shortened to a recognizable name.

For example, the ticker Gazprom shares looks like GAZP, Rosneft - ROSN, а Apple - AAPL.

How tickers appeared and why they are needed

Exchange tickers in the form of letter abbreviations were introduced in order to streamline securities transactionsand for some assurance that the transaction will be done correctly.

Prior to the introduction of tickers, traders on stock exchanges had to shout out the full names of companies. With the increase in the number of companies and the widespread use of telegraph and telephone sets, which were used to communicate between traders and investors, it became almost impossible to work with full names, which led to the introduction of tickers on stock exchanges.

With the advent of the digital age and the widespread use of all kinds of social networks, news feeds, messengers, etc., stock tickers have acquired a new function, allowing a trader or investor to quickly find information about quotes, dynamics and news of a stock instrument by its ticker.

How a stock ticker is selected

When a company takes its securities public, it gets the right to choose a ticker symbol. The rules by which this ticker is formed depend on the stock exchange.

For example, on the NYSE and NASDAQ, companies can use tickers up to four characters long. Some other exchanges have stricter rules.

Sometimes other letters may be added to the ticker symbol. This means that the company has failed to submit financial statements to the relevant regulatory authorities within the prescribed timeframe.

As a rule, a company tries to choose a ticker that is easily associated with its name. For example, Aeroflot - AFLT. However, this rule is not mandatory and if there is a likelihood of confusion, the ticker symbol may be different from the company name. An example of this is SeverstalCHMF ticker symbol, or Gazprom Neft with the ticker symbol SIBN.