What is a Stock Symbol?

Just like a PAN card number is unique for every citizen of India, there is an identification number which is also called a symbol for every company listed on the stock exchange. Similarly, every country has a citizenship card and its citizens have a unique identity number. Stock symbols, too, may have different symbols for each stock exchange.

What is a Stock Symbol?

The stock symbol is a unique identity of stock for publicly traded companies at stock exchanges. It is also called Ticker Symbol or Stock Tickers. This symbol is made up of letters or numbers or both. Usually, the letters are taken from the company's name. The number of letters used in a symbol differs among stock exchanges. For instance, New York Stock Exchange can have up to 4 letters, whereas NASDAQ can have 5 or fewer. It does not make any notable difference.

Before the introduction of the stock symbol concept, the system of placing orders was different. At that time, the orders are conveyed by shouting the company's name by floor traders. With the introduction of stock symbols, the time required to announce the information related to the stock reduced significantly.

Some additional letters can also be incorporated into stock symbols to indicate share class and trade restrictions. The stock symbols are such that traders and investors can identify them easily. It also helps them differentiate the stock among others.

Companies can select their symbol. However, the confirmation of the symbol is in the hands of stock exchanges. Stock exchanges accept the symbol when it is not duplicated and misleading.

Even when the stock symbol is unique for an exchange, a similar symbol or exact match of the symbol can exist on other exchanges for different stocks. One company’s stock can have different symbols at different exchanges, too.

Types of Stock Symbol

Stock symbols can be categorized based on different share classes registered on the stock exchanges. Common stock symbols are made up of 3 or 4 or 5 letters as per stock exchange requirements. According to the share class, additional letters are assigned. For instance, for preference shares, PR can be assigned to the symbol. A mutual fund instrument is an additional X to the symbol.

Class A and Class B shares are recognized by the Last letter A and B respectively. Class A shares are shares with more voting rights whereas Class B shares are shares with fewer voting rights. When K is assigned to the symbol, it indicates specified non-voting shares.

In some exchanges, the last additional letter is assigned to stock symbols to indicate its status. For example, if Q is assigned as the last letter of the symbol, it indicates the bankruptcy of the company. if W is assigned as the last letter of the symbol, it indicates warrants attached with the stock.

Example of Stock Symbol

In the NASDAQ stock exchange in the US, JPM is the stock symbol of JP Morgan Chase &Co. common stock. NFLX is the stock symbol for Netflix inc. common stock. MSFT is the stock symbol of Microsoft Corporation Common Stock.

Google, now known as Alphabet Inc. has two stock symbols for different share classes. GOOG is the symbol for Class C shares that do not have voting rights. And, GOOGL is the symbol for Class A shares with voting rights.

In the New York Stock Exchange, RELI is the symbol for Reliance Global Group Inc. Different group companies of a parent unit have different stock symbols if they have different registered stocks. For instance, different companies from the Adani group have different stock symbols on the Indian stock exchange-NSE. ADANI ENT is a symbol for Adani Enterprises Limited, ADANIGAS is for Adani Gas Limited, and ADANITRANS is for Adani Transmission Limited.

Final Words

The Stock symbol is the unique abbreviation given to the registered stocks which helps the traders to find stocks easily and promptly. Some symbols might look similar due to similar company names. Therefore, the investors need to check and make sure they are investing in the right place. Offensive or misleading stock symbols are disallowed by the stock exchanges.