Symbols are used in all markets to represent stocks.
The stock symbol is an alphabetical representation of the name of a stock, share, bond or mutual fund listed on a stock exchange. The stock---or ticker symbol, as it is also known---is a shorthand way for market traders to identify the stock and associated information. The stock symbol itself may vary in length from one to four letters. Used in conjunction with other information, the stock symbol has become the representation of the stock market.
Stock Symbol Origins
The origins of the stock symbol has its roots in two innovations. The first was the invention and implementation of the telegraph in 1837. Trading in New York had been in operation since 1792, but there was no way of trading stocks outside of New York. The advent of the telegraph changed things, opening trading to brokers and investors outside of New York. In 1867, the stock ticker was invented, dramatically speeding the process of transmitting stock prices and trades. Letters replaced names alongside the trading prices to represent the company being traded. The ticker symbol was born.
Symbol Types and Meanings
The telegraph had limitations, which was why the American Telegraph and Telephone Company was shortened to T. Today's trading has no such constraints, but the ticker symbol remains in use. Important information about the stock, its status and its price may be concisely transmitted. For example, GE 10K@16.11 ^0.45 tells the status of General Electric's stock, whose last trade was 10,000 shares traded at $16.11, up 45 cents from the previous close. Other letters and symbols are used to denote additional information about the type of share.
Market symbols
Each market has its own way of representing the companies listed on it. The NYSE has companies with one or two characters. The Amex market has two or three and the NASDAQ market, which is heavily technology-focused, has four or five characters. For example Citigroup (C) , Ford, (F) and Coca-Cola (KO) are on the main index; Microsoft (MSFT), Apple (AAPL) and Intel(INTL) are on the NASDAQ.
Foreign-based shares are listed with a Y denoting them as a foreign stock called American Depository Receipts. RDS.A-Y represents Royal Dutch Shell's Class A stock in New York.
Symbols Representing Bonds, Industries, Baskets or Commodities
Symbols are used by other categories in the market. Governments and corporations sell bonds that trade using ticker symbols. Groups or baskets of shares called mutual funds trade like stocks and have symbols to represent a fund. Commodities, such as gold, silver and oil, have symbols to represent their trades and whole sectors like health care, consumer staples and energy have exchange traded funds, or EFTs, which may also be traded like stocks and are represented by symbols.
Fun symbols
Companies and their personalities are sometimes reflected in their symbols. YUM is the symbol for the owners of KFC and other fast food chains. LUV is the symbol for Southwest Airlines.
