When a stock acquires the qualifications to be listed on a stock exchange, the stock is assigned a unique symbol. This symbol will serve to assist the traders in identifying the specific stock. The unique symbol or abbreviation assigned can be used in the orders provided to brokers with their respective symbols to denote them.

Rather than having to use the complete name of the company in the orders, the investor can use the symbol allotted for the company.

For instance, rather than using “International Business Machines” an investor can make use of its assigned symbol, “IBM” in the orders.

This symbol is also known as the “ticker symbol”.

Ticker symbols have specific characteristics per the listing company’s policies.

The Ticker Symbols for the companies which are listed for trading on the NYSE or AMEX are allotted 1-3 letters, but the ticker symbols for companies listed in the NASDAQ come with 4-5 letters.