What is a Ticker Symbol?

A ticker symbol is a unique one to five letter code used by the stock exchanges to identify a company. It is called a ticker symbol because the stock quotes used to be printed on a ticker tape machine that looked like the images below. When it printed the stock quotes, it made a tick-tick-tick sound!

Caution: When researching a company, don’t be tricked into thinking that the ticker symbol is just an abbreviation of the company name. Sometimes it is very different.

For example, here are some popular and interesting ticker symbols:

How do companies pick their tickers?

It depends on who is in charge! Companies can choose whatever they want to be their ticker symbol, as long as it’s not already taken, and the regulators don’t think it’s misleading. In a famous case, a company was prevented from choosing FBI as their ticker.

Usually, companies pick a ticker that could be an abbreviation for their company to make it easier for investors to find. Other times, the connection is less obvious. In the examples above, we have:

• LUV, for SouthWest Airlines. They chose this ticker symbol because their business started at Love Field, an airport in Texas.
• HOG, for Harley Davidson. Motorcycle fans will often refer to Harley motorcycles as Hogs, which they borrowed for their ticker.
• BUD, for Anheuser-Busch, is a brewing company, and one of their most popular beer brands is Budweiser, which they used for their ticker.
• KO, for Coca-Cola. CO was already taken when Coca-Cola first became a public company, so they chose the next-best sounding ticker.

Companies will usually choose the shortest possible tickers, since longer tickers seem like newer, less-established companies.

Why do we use tickers?

Most beginning investors find it confusing to use ticker symbols because before you can begin to do any stock research, you must look up the ticker. And when you do look up tickers, you’ll often be surprised how many companies there are that have very similar names. Make sure you double check that the ticker symbol is for the right company. For example, the ticker “COKE” is not the Coca-Cola Company!

Wouldn’t it just be easier if we used the company names?

You can use the Symbol Lookup tool on the research menu to find the correct ticker symbol.

However, lets take a look at where ticker symbols came from, and why we still use them today.

Early Tickers

Ticker machines first came into use during the late 1800s as a fast way to move news across far distances. They used telegraph lines to transmit messages electronically. However, with a telegraph machine, each letter of the message had to be spelled out in Morse Code (a series of dots and dashes), which would be read by the operator on the other end, and then typed out as a message so it could be read by anyone.

This was a time-consuming process; the longer the message, the longer it took to write, translate, and read. To speed things up, shorthand writing, the predecessor of today’s text speak, (e.g. lmao) was invented. Famously, an old British admiral was the first person to use “OMG” as shorthand in a message to one of his colleagues.

For investors looking to get the latest stock prices, this was also a problem. Since there were hundreds of companies being traded, and the prices were updated every minute, so the longer it took to communicate a company’s price meant the whole stream of information was held up. Thus, company names were shortened down to 1-5 characters, and the first ticker symbols were born.

Rise of Electronic Trading

Today, the original reason for tickers is still important; computers still take time to process longer names, so shorter codes can be a lot faster when executing billions of trades per day. If you are making trades as fast as you could, it would take almost 5x longer to write The Coca-Cola Company than it would be to write KO. It saves time and helps to distinguish between companies that have very similar names.

Classes of Stock

Another reason why we continue to use tickers is because some companies have multiple types of stock.

For example, Google has stocks under the ticker symbol GOOG and GOOGL. These stocks are very similar, but they were issued at different times and have different prices, since each share represents a different percentage ownership of the company, and provide different rights for investors.

Sometimes you might see a “.A” or “.B” after a ticker symbol. This usually indicates a class A or class B type of share. Companies may occasionally issue different classes of shares if they issue stock more than once, and each class represents a different percentage ownership of the company.

Symbol	Company	Description	Difference
BRK.A	Berkshire Hathaway – Class A	Warren Buffet’s company – original issue of shares.	Core Berkshire – Hathaway stock, worth about $250,000.
BRK.B	Berkshire Hathaway – Class B	Warren Buffet’s company – second issue of shares.	Secondary shares issued later, for 1/1500 of one share of BRK.A.
GOOG	Alphabet	Alphabet Google’s original stock	After 2012, these are non-voting shares.
GOOGL	Alphabet	Alphabet Google’s new stock	After 2012, these stock holders can vote in shareholder meetings.

You can see there are a few reasons to have different classes of stock. Berkshire Hathaway’s stock shares are worth smaller percentages of the company, and so the “B” shares are worth much less than the “A” shares. Alphabet Google’s shares are technically worth the same percentage of the company, but only the GOOGL shareholders can vote in shareholder meetings to determine the direction of the company.

How to Find a Stock’s Ticker Symbol

On most financial websites, you will find a quotes or get quotes page, that allows you to look up the ticker symbol and financial information for publicly traded companies. There should be a search bar, like the one below, that says Ticker Symbol Lookup, or similar. If you can’t find a symbol look-up page, then try searching the company name, and you should find relevant tickers listed. Just make sure that the company description matches the company you’re looking for!

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