🔴 The meaning of the US stock code and its different suffixes

🔺 Historical evolution

In the 19th century, when modern stock exchanges were born, market traders had to communicate the trading company's stock price by writing or shouting out the company's name. As the number of publicly traded companies grew from dozens to hundreds, they soon realized that the process was time-consuming and hindered the queuing of information to keep up with frequently changing prices — especially after the introduction of the Stock Quoting Ticker Tape Machine, an automatic stock price register in 1867. In order to more effectively relay price changes in the company's shares to investors, the company name was shortened to one to five capital letters, commonly known as the Ticker Symbol.

🔺 Avoid clutter

In addition to saving time and capturing specific stock prices, stock codes are also useful when two or more companies have similar names. For example, CIT Group Inc. and Citigroup Inc. have almost the same name. But they are not interrelated: the former is a financial holding company, while the latter is a financial services and investment bank. Investors who want to buy shares can easily get it wrong if they use the name of the company.

In this case, if both companies are trading on the New York Stock Exchange, then CIT Group Inc.'s stock symbol is CIT; while C stands for Citigroup. The next time you call your stock broker, if you have a reliable artificial stock broker, then she/he will confirm with you that it must be the ticker symbol, not the company name.

There are also companies that are spin-offs of the same company and have similar stock codes. In November 2015, HP spun off into two separate companies - Hewlett-Packard Enterprise and HP Inc. The former is Hewlett-Packard Enterprise, whose stock code is HPE. As a business services and hardware division, it focuses on servers, storage, networking, and security. The latter, Hewlett-Packard, is a consumer-oriented computer and printer division. Its product market size is smaller than that of HP, and the stock code is HP. Then investors who buy HP Inc. shares must conduct due diligence to ensure that they have the correct stock code for the correct company department.

🔺 Elegant symbols

If a company trades in more than one category of shares on the market, then it adds that class to its suffix. If it is a preferred stock, the letter “PR” and a letter indicating that class are usually added. For example, a fictional preferred stock called Cory's Tequila Corporate Preferred A share would have a symbol such as CTC.PR.A.

Also, it should be noted that different financial advisory platforms will reflect preferred stocks in slightly different ways. For example, if Bank of America common shares are traded with the stock code BAC, then Bank of America's non-cumulative preferred D-series shares will:

Cited as BAC-PD on Yahoo;

Cited as BAC-D on the Standard & Poor's platform;

Cited as BACPRD on the New York Stock Exchange;

Cited as BAC+D in Charles Schwab,

Cited as BACPD in e-Trade;

Cited as BAC.pd in MarketWatch;

Cited as BAC_PD in Vanguard;

Cited as BAC/PD in Bloomberg.

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🔺 Same shares, different rights

Some stock codes indicate whether a company's shares have voting rights, particularly if the company has multiple shares traded on the market. For example, Alphabet Inc. (formerly Google) trades two types of stocks on NASDAQ, with the stock codes GOOG and GOOGL. Since GOOG shares are Class C shares, GOOG's common shareholders do not have voting rights, while GOOGL shares are Class A shares and each has one vote.

As another example, Berkshire Hathaway Investments, which Buffett is in charge, trades two types of stocks in Class A and Class B on the New York Stock Exchange. Class A shares have the stock symbol BRK.A, and the Class B stock symbol is BRK.B. Their voting rights are lower than Class A stocks, and OK is much lower than that of Class B shares: the voting rights for Class B stocks are one-half percent of Class A shares.

I will dedicate a separate chapter to Buffett's Class A shares and Class B shares. Click Unlisted here.

As mentioned before, companies that trade on the NYSE usually have three or fewer letters representing their stock code. NASDAQ companies usually have four or five letter symbols, such as

Adobe Systems (ADBE)

Apple, Inc. (AAPL)

Alphabet Inc. (GOOG or GOOGL) and

Groupon Inc. (GRPN).

After this rule was broken a few years ago, companies with fewer than four letters appeared on the NASDAQ, including Facebook (FB) and Futures (FHL) as we see it today.

Additionally, companies moving from the NYSE to NASDAQ can keep their stock codes. Hardly anyone does that, though.

🔴 Additional symbols and trade statuses 🔴

Stock codes are also used to communicate information about a company's trading status. This information is usually indicated by adding some symbols after the letter of the company's stock/fund code. Companies on the New York Stock Exchange will be marked with a dot and a letter. On the NASDAQ, just simply and crudely add a letter.

For example, NASDAQ listed ACERW - the first four letters are Acer Therapeutics Inc. (ACER)'s stock code, and the last letter 'W' indicates that the stock is accompanied by a warrant. Companies in bankruptcy proceedings will have a Q after their symbol, while non-US companies trading in the US financial markets will have a Y letter after their stock code. The meaning of the letters A to Z is shown here:

A - Class A shares, such as BRK.A

B - Class B stocks, such as BRK.B

C - Issuer Eligibility Exception - The company does not meet listing requirements on all exchanges, but can remain listed on exchanges for a short period of time.

D - Additional Stock Issuance

E - Delayed or missed one or more SEC filings

F - Foreign issues

G - First convertible bond

H - Second Convertible Bond

I - THIRD CONVERTIBLE BONDS

J - share of vote

K - Shares without voting rights

L - Miscellaneous, such as foreign preferred shares, Class III warrants, priority issuance of shares, Class V preferred shares, etc.

M - Class IV Preferred Stock

N - Third Class Preferred Stock

O - Second Class Preferred Stock

P - First Class Preference Shares

Q - In bankruptcy proceedings

R - Rights

S - Beneficial Equity Shares

T - Licensed or entitled

U - unit

V - When and when to release. These stocks are about to go through announced corporate action plans, such as stock splits.

W - Warrants

X - Mutual Funds

Y - American Depositary Receipt (ADR)

Z - Other situations (same as the letter L)

OB - OTC

PK - pink single inventory

SC - NASDAQ SmallCap

NM - Nasdaq National Market

Investors should do due diligence on stocks with the following letters (C, E, L, Q, V, Z) after the stock code before purchasing company shares.