How To Understand Stock Market Symbols

We've all seen that line of letters and symbols stream across the bottom of our screens during the nightly news

. It's the stock ticker and it shows stock market symbols and other information that not only affects businesses in the United States, but all over the world.

Even if you're not an investor, learning to read and understand stock market symbols through the daily stock ticker will be an eye-opening experience. And if you do plan on investing someday (everyone should!), reading the stock ticker is the most basic place to start.

First, it's important to understand what all those little stock market symbols mean. Consisting of no more than three capital letters, New York Stock Exchange stock market symbols are basically shorthand for a company name.

A company may choose their own letters but they can't choose ones that are already in use. So they typically try to pick something that sounds like their brand name, such as Exxon which uses XON, or their most popular product, like Anheiser Busch which uses BUD.

Next, the numbers that appear after the stock market symbols are stock numbers. These represent the number of shares traded. Stock numbers are also abbreviated and will show a letter after each number that represents either K for thousand, M for million, or B for billion. Therefore, 15K represents 15,000. The second number you see after the stock number is the final bid price. So if it's showing 45.60%, that means the final bid was $45.60 per share.

The arrows you see after the stock market symbols and stock prices represent trending. If the arrow is pointing up, that means the stock is rising, which means the bid price is now higher than the stock's previous bid price. The reverse will be true if the arrow is pointing down. Instead of an arrow, you might also see a plus or minus sign. In that case, plus is up and minus is down.

Sometimes television networks will also use color to help viewers understand which way a stock is trending. Blue or white letters indicate a stock's price hasn't changed since yesterday's market close. And while red indicates a stock price has fallen, green means it's on the rise.

Finally - here's a bit of trivia for you -- we call it a stock "ticker" because in the early 20th century a machine that made a distinctive ticking sound would print out the day's stock prices.

Copyright (c) 2010 John Howell

by: John Howell

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