What Is a Ticker Symbol?
A ticker symbol or a trading symbol is an abbreviation used to identify a particular security listed on an exchange or otherwise publicly traded.
When a company decides to issue securities on the stock market, besides choosing an exchange, on which they are going to be traded, it has to select an available ticker symbol.
The ticker symbol is used to facilitate the great amount of transactions that take place every day on the stock market. While it is common to have the ticker symbol an abbreviation of the company's name, it does not necessarily have to be so. Availability may prevent a company from getting a symbol that relates to its name.
Interpreting the Symbol
The New York Stock Exchange (NYSE) uses ticker symbols with up to three letters (such as FB for Facebook Inc. or F for Ford Motor Company). Nasdaq-listed stocks have ticker symbols consisting of four letters (such as TSLA for Tesla Motors Inc. or AAPL for Apple Inc.).
There are also some special symbols that appear either as an additional letter in the symbol or, for NYSE stocks, after a dot to denote certain types of securities. Symbols ending with an X denote mutual funds and are usually alphanumeric. Tickers ending with a Q denote issuers that are in bankruptcy, a Y denotes that the security is an ADR. Ticker symbols for options are structured to represent the underlying stock ticker they are based on, whether it is a call or a put option, the expiration month and the strike price.
When a ticker symbol is followed by the letter E on the Nasdaq Stock Market or an LF on the NYSE, it indicates that the company associated with the stock has fallen behind on its reporting duties to the SEC. Often, companies get a grace period to fulfil their reporting requirements and the extra letters are removed when the requirement is met. However, if the company fails to meet the requirement in the grace period, the security may be removed from trading.
OTC stands for "Over the Counter". It means a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. Similarly, OB stands for "over-the counter bulletin board" and PK for "Pink Sheets".