What Is the Ticker Symbol

Ticker symbols exist to uniquely identify companies. In rare instances, though, they can also cause confusion. One example of this is the company Zoom Technologies, whose stock price rocketed by 3,700% in early 2020. During the

COVID-19 pandemic, video communication platforms like Zoom experienced a business upturn as many office employees shifted to working from home. Consequently, investors in droves mistakenly bought oodles of shares bearing the abbreviation ZOOM. They belonged, however, to a manufacturer of mobile phone parts. Once the misunderstanding came to light, the company’s stock price plummeted to an even lower level than before the accidental boom. In reaction to that and to prevent further mix-ups from happening, the US Securities and Exchange Commission assigned the cellphone parts maker a new shorthand symbol: ZTNO.

Disadvantageous abbreviations can occasion adjustments to ticker symbols, but so can mergers, as a recent example illustrates. Avolta changed its previous stock ticker symbol to better match the company’s new name. It had formerly been called Dufry and sported the symbol DUFN. After the merger with Autogrill and the renaming of the combined company to Avolta, it made sense to switch to the abbreviation AVOL in order to ensure a consistent corporate image.

Alongside the alphabetic codes, there is also a three-digit numeric code for each currency, which proves to be very useful particularly when currency codes are employed in countries that do not use Latin scripts. Wherever possible, the numeric currency code is the same as the three-digit ISO numeric country code. The code 840, for example, stands for the USA and thus also for the US dollar.

Particularly in the early years after the introduction of ticker symbols, joint-stock companies were free to choose which abbreviation they wanted to use because only a few letter combinations were already taken. They thus could get really creative. US-based restaurant chain operator Brinker International, for example, chose EAT as its ticker symbol. It has a strong recognition value and is easy to remember even though it has no direct connection with the corporation’s name.

Ticker symbols come into being differently depending on the country, securities exchange, and asset class in question. European ticker symbols normally consist of four to five letters, whereas US securities exchanges frequently use just one to four letters. Asian countries often use just numbers in order to avoid transcription problems.

On BME exchange, the issuer proposes and formally requests from Sociedad de Bolsas an alphanumeric ticker of up to five positions. This ticker is checked to ensure that it is not an existing ticker and is then approved.

It is possible to create a ticker with three positions followed by ”.P” for “preference”’ shares (e.g. GRF.P); class B (SAI.B) or .D for share rights (IBE.D) or for new shares (FAE.N).

In the SME Growth market, BME Growth, the procedure is similar. The company or the company’s registered advisor formally applies to Sociedad de Bolsas for a ticker of up to five alphanumeric positions. The ticker is checked to ensure that it is not an existing ticker and is approved. The ticker for the so called SOCIMIs (companies that own, operate, or finance income-producing real estate across a wide range of property sectors) always begins with a “Y”, with “SC” in the case of Scaleup companies and with “X” for Latibex companies. For SICAVs (open-ended collective investment schemes) and SILs (funds that has fewer restrictions than SICAVs) on the other hand, a correlative order is assigned, with the ticker for SICAVs always beginning with an “S“ and with “SL“ for SILs.