Finance Roll

When I was a young person, I wondered why some neatly dressed, serious businessmen were so fascinated with the stock market ticker-tape inside the lobby of a big stone building. Was it inside the NY Stock Exchange or the Fidelity Brokerage, I cannot remember, but this was much before the time when the image of stock market ticker tape made it into our homes with the TV channel FNN to later appear on the screen through other channels.

Nowadays, most anyone from investors, brokers, economists, money managers to lay people are interested in watching the tape. In that case, to what purpose does the ticker tape serve?

The ticker tape exhibits what goes on in the markets by signaling the action and the latest price of the stocks. A stock is a unit share of any one public company. When one looks at a tape, he sees that the tape records several characters.

If a person is following the action of any one company, he would have to know the stock symbol of that company to read its action on the ticker tape. Let us take as an example the Coca-Cola Company with the symbol KO. The tape would show:

KO -the ticker symbol of the company

9M- the amount of shares traded, in this case M stands for million, as K would stand for a thousand and B for a billion

@ -at

60.79- the last bid price in that day per share of stock

and up or down arrow - to show the direction of change

0.83- the amount of change

The number of letters in a symbol usually indicates where the stock trades. For example, a stock with a four-letter symbol would be in NASDAQ, and a stock with a symbol of three or fewer letters would be in the NYSE or AMEX, while a stock with a five letter symbol and a Y or an F at the end would belong to a foreign company.

The stock exchange took its roots in 1653 when a twelve foot stockade was erected in Manhattan against the attacks from the Indians and the British. Afterwards, Wall Street was built along the line of the stockade, and in 1790, the traders' markets came into existence.

The stock ticker's invention dates back to Edison and the telegraph technology. This invention was called a ticker tape because of the noise made by the printing mechanism. Other ticker tape inventions by Calahan, Phelps, and Laws, followed; however, it was Edison again who came up with The Universal stock ticker that performed better and faster than the rest.

After the New York Stock Exchange bought the rights to a stock ticker, it started selling stock information to brokers and other business people who kept tickers that printed out the information in their offices. During celebrations and parades, the office workers threw these rolls of paper out of the windows, and the phrase ticker tape parade was coined. The first ticker tape parade was in October 1886, during the dedication of the Statue of Liberty.

While the ticker tape that prints on paper is no longer in use and is replaced by the electronic tickers, the basic principle of analyzing the tape stays the same. Even though the entire economy does not depend solely on the stocks' actions, the streaming ticker tape still provides an insight into the markets, especially if one is familiar with the stock symbols.

Sources:

Encyclopedia of American History Sixth Edition ed. by Richard Morris (New York: Harper & Row, Publishers, 1982).

Opdyke Jeff D., The Wall Street Journal: Complete Personal Finance Guidebook, copyright 2006 Dow Jones & Company (Three Rivers Press, Publishing Company, 2006)

Financialhistory.org

Investopedia.com

Traders.com- Resource documents

NYSE.com