Choosing the ideal investment that matches your risk tolerance and investing goals is difficult, especially when you have many options. To do this, you must comprehend each stock, its performance indicators, price, associated risks, etc., and then compare them to determine which is best for you. One such tool to assess the performance of the stock is Ticker Tape.
Have you seen alphanumeric symbols associated with different colors and signs in stock market news? What does that mean? How will it benefit investors? Different stock exchanges depict different stock symbols, values, price changes, and previous values in Ticker Tape. Let us understand what Ticker Tape is and its uses in this article.
What is Ticker Tape?
Ticker Tape is a ribbon that shows the price change in particular stocks continuously and in real time. Also, it distributes price quotes linearly and gives investors market data. Today’s ticker tape is electronic, and information is sent to investors worldwide using computer equipment.
Evolution of Ticker Tape
Edward A. Calahan created the first ticker tape machine in 1867, and Thomas Edison later enhanced and modernized it. During the late 19th and early 20th centuries, stock quotes and trades were mechanically reported and broadcast on paper ribbons known as Ticker Tape. When ticker tape machines first came out, they used technology similar to the telegraph machines of the day.
The ticker tape system consisted of a paper strip that crossed a stock ticker machine. The company names were printed on this machine in truncated or abbreviated form. It was followed, among other things, by the price and volume of stock transactions. The entire set-up is called the Ticker Tape because of the machine’s ticking sounds.
Together with numerical indicators of current stock prices, alphanumeric ticker symbols or codes were employed to identify the many companies trading on the stock market. The data was entered on a special typewriter, sent via telegraph to stock ticker machines, and written up on Ticker Tape.
How to read Ticker Tape?
Each entry on the Ticker Tape includes the following:
- Stock symbol (which identifies the company whose stock has been traded)
- Volume (the number of shares traded),
- Price per share at which the trade was executed
- An up-or-down triangle indicating whether the price is higher or lower than the closing price of the previous trading day
- A second number indicates how much higher or lower the trade’s price was than the previous closing price
Let us understand this with an example.
Following are the parameters and their meaning in the above Ticker Tape.
It consists of unique characters that signify the company’s name.
The volume of shares traded being quoted. Abbreviation where K=1000, M= 1 million, B= 1 billion
This signifies the price per share for a particular trade.
Change in Direction:
It shows whether a stock trades lower or higher than the previous day’s closing price.
Change in Amount:
Change in price from the previous day’s closing price.
Green means the stock is trading higher than it was at the close of the previous day. The red color shows that the stock is trading below where it closed the previous day. The stock’s price remains constant from its prior closing price if it is blue or white.
How to invest in stocks using Ticker Tape?
The primary purpose of Ticker Tape is to depict the current market price along with the closing price at the end of the day. Overall, Ticker Tape displays the market trend of any stock at that particular time. Ticker Tape data also helps technical analysts evaluate stock behavior using charts.
Ticker Tape shows stock price fluctuations to aid in performance analysis. It also gives regular updates on yearly and quarterly financial and business actions, which are vital to investing in stocks and their success. However, with the emergence of new technologies such as artificial intelligence, machine learning, and robotics, mobile apps are expected to depict future values more accurately.
- This blog is exclusively for educational purposes
- Investments in the securities market are subject to market risks; read all the related documents carefully before investing