Which Exchange Is My Stock On?
Nowadays, stock exchange symbols (based on they're length) can't even tell you which stock market a stock is traded on. Sorry. It would be kinda cool if you could though, right? But why do I even bring it up?
Because not too long ago, you could. In fact this only recently changed (a few years ago) in 1997. So, before 1997, you were actually able to tell if a stock was on the NYSE. The NYSE was the first stock exchange and because of this, the first companies were listed on this exchange. These tickers all consisted of one or two letters.
After the NYSE came the AMEX. Companies were now awarded three letter stock exchange symbols. These stocks were placed on the AMEX (American Stock Exchange) or the NYSE (New York Stock Exchange). So every company (pre 1997) with a three letter symbol was traded on either the AMEX or the NYSE.
Lets not forget the NASDAQ (National Association Of Securities Dealers Automated Quotations). At the time, any stock symbol with more than three letters was traded on this exchange. So what happened?
Well a law was passed where companies could change which exchange they traded on. However, we didn't just wake up one day and everything was different. In fact, it was a...
Slow Change
The first restriction that was lifted allowed stock exchange symbols with three letters that were on the NYSE, to move to the NASDAQ and keep the same symbol. Of course, policy loosened and pretty soon more companies were free to move about from exchange to exchange.
Now, companies can move from the NASDAQ to the NYSE regardless of how long they're symbol is. As you know, the NYSE is the most prestigious of all the exchanges. So, obviously they don't mind if a few companies leave. So, with all this moving around, the NASDAQ now hosts companies with symbols ranging from one to five letters.
The Reason For Longer Tickers
Many stock exchange symbols have one to four letters. However, you do see a few with five letters. Why exactly is this? The fifth letter represents something about they're company. It gives you a little bit of insider information.
Even though with many stocks now a days you cant tell which market they trade on, with five letter stocks, you can. If there is a period before the last letter (or the last two letters), it is on the NYSE and if there is no period, it is on the NASDAQ.
You can also see four letter stock symbols with a dot near the end. The preceding letter still means the same thing. So, what exactly does the extra symbol stand for?
As you may have guessed, there are many different things it could stand for. For example, "X" stands for "Mutual Fund", "F" stands for "Foreign", and "E" stands for "Delinquent With The Sec".
Ezra Salken is the editor of http://www.successful-stock-trading.com/, the successful stock trading guide. For the top 7 things you should know before you start stock trading, check out http://www.successful-stock-trading.com/stock-market-for-beginners.html - Copyright: you may freely republish this article, provided the text, author credit, the active links and this copyright notice remain intact.
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