How to Read a Stock Market Ticker Tape Quote
Everyone has seen it at one time or another, the dentist's or doctor's office, on television while watching CNBC or your favorite news channel. The mysterious constant flow of symbols and numbers rapidly moving seemingly without end across the bottom of your television screen. If you're an experienced investor, chances are a comprehensive understanding is already in pocket, but if your not, all the letters and numbers scrolling by with unbridled acceleration might as well be written in ancient alien script.
After reading the following article and absorbing the basic concept and tips contained within, it is highly unlikely you will immediately achieve expert investor status however, you will undoubtedly acquire and subsequently possess the in depth knowledge necessary to decode and comprehend this ticker tape of hidden financial information with the best of them. There are several underlying themes a professional can gain insight to by effortlessly executing a simple glance, and the following user friendly explanation will empower every novice by providing a clear, concise, basic understanding of the overtly expressed and subterranean intangible data contained within the scrolls.
What is a Ticker Symbol?
A "Ticker Symbol" is a short identification or "ID Card" if you will, assigned to each security traded on all exchanges. A brief and easy "Tag" to quickly and efficiently identify any particular issue you are interested in following or researching. For instance, Coca-Cola = KO, Hewlett Packard = HP, Johnson and Johnson = JNJ and so on. There's no secret meaning or complex reason why a specific ticker symbol is assigned to each security it's just a way to speed up the identification process, not to mention a huge ink saver, plus it saves considerable space on the tape.
What is a Ticker Tape?
- A brief condensed "Real Time" or "Delayed" snapshot of trading data related to a specific security -
- With a quick glance you can determine the following information -
Change in price from previous transaction
If the last price was HIGHER or LOWER than the previous price ( Is the stock trending UP or DOWN )
Are individuals or Institutions predominantly trading a specific issue
Volume of the last transaction ( Trade )
There are several other factors a seasoned professional investor can determine from simply reading a ticker tape but the information listed above is our central focus -
Essentially, a "Ticker Tape" is a rapid scroll transmission of information related to the most actively traded securities listed mainly on the NYSE & NASDAQ stock exchanges. A tape contains the full company name along with the abbreviated "Ticker Symbol" which consists of 1 letter all the way up 4 or 5 depending on the market place. It's a direct feed from both exchanges which can be disseminated to the public via third party in "Delayed Mode" or "Real Time" depending on the source receiving and transmitting the data.
Basic information displayed on a ticker tape is the full company name, the applicable ticker symbol ( Letters following the name ), the quantity of shares exchanging hands for that specific trade, and finally the price change either up or down from the previous transaction.
---------- Microsoft ( MSFT ) 500@ $20.00 ^ .20 ----------
( MSFT )
Company Ticker Symbol
Number of Shares Exchanging Hands
At Noted Price
Price Per Share
UP from last Transaction ( Down arrow indicates Price DOWN from last Transaction )
UP .20 cents from last Transaction
- 500 shares of Microsoft just exchanged hands ( Sold ) for $20.00 per share - Up .20 cents from the previous sale ( Transaction ) -
- Note: A "K" next to the volume indicates a transaction in "Thousands". If there's no "K" , the number noted is the actual share total.
- Note: The change in price is calculated from the last sale NOT the previous days Closing Price
> NYSE 3 Letters or Less / NASDAQ 4 Letters or More
The current standard for a NYSE listed security is a ticker symbol that consists of 3 letters or less, NASDAQ issues contain a total of 4 or more letters. The formula provides easy identification if you are searching through a newspaper or any other publication such as an online financial web site. Professionals like this instant ID system mainly for time saving purposes. Some investors will only purchase securities on a specific exchange for various reasons, and if an individual is only interested in a security listed on the NYSE or the NASDAQ, it's very easy to quickly and efficiently scan the data source to find candidates for potential consideration. For example, if the unique ticker symbol is noted in the newspaper or other source he or she is researching, with a quick glance to tally the number of letters, the investor can immediately determine if it's an issue that trades on the exchange he / she prefers.
> Delayed Ticker Tape On Major Networks
Always remember, if you are watching one of the two dominant Business News Channels such as CNBC or Bloomberg, both the NYSE & NASDAQ ticker tapes are in 15 to 20 minute delay mode, which means the information displayed is actually from 15 to 20 minutes earlier. This is true of most ticker tapes that I'm aware of with the possible exception of your online brokerage account which usually generates both a delayed and real time version ( "Real Time" Ticker's & Stock Quotes are sometimes offered to customers for free, or as a "Premium" service depending on the firm ). If you have an online discount brokerage account complete with interactive research tools, make sure you are using the "REAL TIME" Charts & Graphs as well, most of these services are also delayed unless otherwise stated.
You've done your research and due diligence on the fundamentals of a specific company so I'm sure the last thing you need, especially in such a fast paced environment as the equities markets, is to place a buy or sell order only to have it executed based on dated information.
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When you observe a ticker tape feed scrolling across your television screen, NYSE quotes and related data is displayed on the top level and NASDAQ data on bottom. Two of the main reasons for NYSE priority is daily volume and overall prestige of this long standing American Institution which was conceived and began operations as an open out dry bartering system on a dusty street corner over a century ago. Hard to believe this fast paced, bustling whirlwind of financial activity is rooted in such modest and humble beginnings. On average, daily trading volume attributed exclusively to the NYSE can reach in excess of the one billion mark which is certainly an extraordinary number of shares to exchange hands by any measure. Not to be totally upstaged, NASDAQ volume trails right behind at a very close, respectable second place.
So whether it's CNBC, Bloomberg, or even the fledgling Fox Business News Channel which now operates a more simplified price quote display system, enjoy the scrolling information snapshots and look for New York Stock Exchange quotes on top and NASDAQ quotes right below.
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