All securities listed on either the New York Stock Exchange, the American Stock Exchange, or the NASDAQ system are identified by a unique stock symbol or ticker symbol. The stock ticker symbol appears on the “ticker tape” that scrolls across the bottom of most financial news programs whenever the stock is traded. A stock’s symbol also provides the investor with some basic information about the company.
NYSE & AMEX Symbols
If a stock symbol consists of one, two or three letters, the stock represented by that symbol trades on one of the two exchanges, either the New York Stock Exchange (NYSE) or the American Stock Exchange (AMEX). One exception to this general rule occurs when a company that trades on the NYSE or AMEX has both “A” and “B” class shares. In this case, a stock with a four-letter symbol ending in A or B may trade on the NYSE or AMEX.
Most four-letter stock symbols represent stocks that trade on the NASDAQ system. Some NASDAQ issues also have five-letter symbols. The fifth letter in a five-letter symbol provides information about the company. Sometimes, the fifth letter identifies the type of stock, or the type of security:
- A or B: represent A and B class shares for NASDAQ stocks
- V or Y: represent American Depository Receipt (ADR) shares
- F: represents a foreign stock trading on NASDAQ
- G or H: represent a convertible bond
- M, N, O or P: represent a preferred stock
- W: represents a warrant
- L or Z: represents various miscellaneous classes of stock or types of security
However, sometimes the fifth letter provides a warning to the investor about a more serious issue concerning the company:
- Q: means the company is in bankruptcy proceedings
- E: means the company is delinquent in required filings with the SEC, as determined by the National Association of Securities Dealers , or NASD (this may be a sign of trouble)
- C: means the company is exempt from NASDAQ listing qualifications for a limited period of time (this may not be serious, but the investor should keep an eye on the situation and make sure the company meets the listing qualifications once the limited period of time ends)
Much more information is needed about a company to determine if it represents a good investment opportunity than can be found in the symbol. However, it doesn’t hurt to know the basics. For more information, contact Henssler Financial at 770-429-9166 or [email protected].