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, identifiers.

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.