Ticker Symbol Identifiers
Stock Symbols Demystified
Most people understand the basics of stock symbols: three letters means it's traded on the NYSE
and AMEX, four letters means it's traded on the Nasdaq. But not so many people realize that ticker
symbols on OTC (over the counter) stocks and on Nasdaq-traded securities can
have a fifth letter. That fifth letter
isn't chosen by the company, either.
It's actually assigned by the SEC (Securities and Exchange Commission)
and can tell you some very important information about the stock.
Here are some of the most important, and most common,
F -- An ‘F' as the fifth letter of the ticker symbol
designates the stock as foreign. This
does not mean the stock is traded on a foreign exchange instead of the
Nasdaq. While it might also be traded
on a foreign exchange, it is also traded on the Nasdaq or OTC exchanges and is
responsible for following all U.S. rules and restrictions. Most foreign companies traded on the Nasdaq
have operations and business units in the U.S.
An example of this kind of stock is Globalstar Communications, which
trades under the ticker symbol GSTRF.
Y -- The letter ‘Y' represents an ADR (American Depositary
Receipt) traded OTC in the U.S. An ADR
represents foreign shares of a security held by a bank or brokerage. The ADR is not the foreign stock itself,
rather it is a claim to the foreign stock held by the U.S. bank or
brokerage. The ADR is priced for sale
in the U.S., and is sold by the individual banks and brokerages, not on any
major exchanges. Essentially, the ADR
is a convenient way of purchasing foreign stocks without the complexities of
overseas and cross-border transactions.
E -- Any stock with the identifier ‘E' should get a red flag
from a potential investor. That's
because the ‘E' means the company has been delinquent in its filings with the
SEC. This is not a good thing. Most investors and institutions avoid stocks
with filing problems like the plague.
Filing problems are usually a result of management problems, which
doesn't sit well for the entire business.
In addition, companies that can't file properly with the SEC are much
more likely to drop a bomb about a previous earnings announcement being
incorrect. A stock with an ‘E'
identifier should certainly be viewed with caution.
Q -- A stock with a ‘Q' identifier is probably in very bad
trouble. A ‘Q' signifies that the
company is in bankruptcy proceedings.
This is bad for obvious reasons.
A company in bankruptcy could quite possibly have its stock's share
price drop to zero. Even the value of
the company's assets would go to the bondholders rather than the
stockholders. Buying a company in
bankruptcy proceedings is a very risky venture.
These are only a few of the most common types of stock
identifiers. Knowing what the stock
symbol means is a valuable means of evaluating a stock. It is also a good way to avert a
disaster. It pays to know a handful of
these identifiers. Here's a more
complete listing, courtesy of Investopedia.com:
A - Class A
B - Class B
C - Issuer qualifications exceptions
D - New
E - Delinquent in required filings with the SEC
F - Foreign
G - First convertible bond
H - Second convertible bond
I - Third convertible bond
J - Voting
K - Nonvoting
L - Miscellaneous situations, such as depository receipts, stubs, additional warrants, and units
M - Fourth class of preferred shares
N - Third class preferred of preferred shares
O - Second class preferred of preferred shares
P - First class preferred of preferred shares
Q - Bankruptcy Proceedings
R - Rights
S - Shares of beneficial interest
T - With warrants or with rights
U - Units
V -- When issued and when distributed
W - Warrants
X - Mutual Fund
Y - ADR (American Depository Receipt)
Z - Miscellaneous situations such as depository receipts, stubs, additional warrants, and units.