If you ever eaves drop on a day trader yakking into his cell phone (not that you’d want to) you’re liable to hear a litany of letters strung together around high-octane Wall Street words like “P/E ratio”, “Yield” and “Dividends”
No problem. Chances are the letters stand for the stock symbols the trader is buying and selling and the Wall Street verbiage simply points to how well the stock in question is doing that day in the financial markets.
It’s lingo, however, every investor should come to know. So for a brief tour of stock symbols and trading tables, look no further. You’ve come to the right place.
Stock Symbols
Stock ticker symbols have a pedigree that any Vanderbilt would be proud of. Ticker symbols appeared in 1844, shortly after the introduction of the telegraph machine. Wall Street fell in love with the symbols immediately, as stock prices could be transmitted by brokers in seconds instead of days. Full names of companies were used at first, but that proved unwieldy. Frustrated wire operators began transmitting stock prices with the company name in shorthand, and a revolution was born.
About 25 years later, just after the Civil War ended, the first stock ticker machine began clacking away in New York City. At the turn of the century, newspapers began tracking stock prices via ticker symbols on their business pages. A millennium later, you can still find stock tickers in newspapers. But it's also generated electronically online on business web sites like The Motley Fool, CBSMarketwatch.com, and a host of others.
Here's how stock symbols work. Each stock traded on global exchanges is identified by a short symbol. For example, the symbol for Citigroup is "C". Similar abbreviations are used for stock options, mutual funds and many other securities.
Ticker symbols get reused on different exchanges, so you'll sometimes see a qualification ahead of the ticker symbol. For example, the symbol "C:A" refers to a company traded on one of the Canadian exchanges (Toronto, to be exact) with the symbol A. The stock quote services on the web usually understand this notation.
Stock symbols are designated by one, two, or three or more letters for a reason. A ticker with three letters or fewer indicates the company trades on the New York or American exchanges. Tickers with four or five letters trade on the Nasdaq, Nasdaq Small Cap or OTC Bulletin Board markets.
When you run into a stock ticker symbol with five letters, there's usually a story behind the company. If, for example, a stock ticker symbol has an "E" at the end of its name is considered by the Securities and Exchange Commission to be delinquent in filing key regulatory documents. A "Q" tells a more troubling story -- it's the scarlet letter that tells investors a company is in bankruptcy proceedings.
Understanding Stock Tables
Once you know what stock symbol to look for the next step is to go onto the World Wide Web or open your daily newspaper’s business section and find your stock table. It will look something like this:
Examples of Stock Table:
Thursday, May 15, 2006
ABC Corporation
52 WEEKS/HI-LO SYM DIV VOL YLD P/E CLOSE CHANGE
$47-$37 ABC 230 335 5 10 $39.50 +$1
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(52 WEEKS/HI-LO) 52-Week Hi and Low. These are the highest and lowest prices that a stock has traded at over the previous 52-weeks (1 year). This typically does not include the previous day's trading.
(SYM) Ticker Symbol. As noted above, this is the unique alphabetic name which identifies the stock on the exchange's ticker. The ticker tape will quote the latest prices alongside this symbol. If you are looking for stock quotes online, you always search for a company by the ticker symbol.
(DIV) Dividend Per Share. This indicates the annual dividend payment per share. If this space is blank, the company does not currently pay out dividends.
(VOL) Trading Volume. This figure shows the total number of shares traded for the day, listed in hundreds. To get the actual number traded, add "00" to the end of the number listed.
(YLD) Column 6: Dividend Yield. The percentage return for the dividend. Calculated as annual dividends per share divided by price per share.
(P/E) Column 7: Price/Earnings Ratio. This is calculated by dividing the current stock price by earnings per share from the last four quarters. For more detail on how to interpret this, see our P/E Ratio tutorial.
(COSE) Daily Close. The close is the last trading price recorded when the market closed on the day. If the closing price is up or down more than 5% than the previous day's close, the entire listing for that stock is bold-faced. Keep in mind you are not guaranteed to get this price if you buy the stock the next day. Because a stock's price is constantly changing (even after an exchange is closed for the day) the close merely serves as an indicator of past performance.
CHANGE) Net Change. This is the dollar value change in the stock price from the previous day's closing price. When you hear about a stock being: "up for the day" it means the net change was positive.
Note that many newspapers and some Web sites will often change the sequence of the provided information. Some newspapers may even provide less information, possibly only providing the closing price and not the high and low for the day.
Remember, the stock table provides you with essential information about the company's stock price. So being able to understand a stock table puts you one big step closer to becoming a smart investor.