What Is Ticker Tape?
Ticker tape refers to the ribbon of paper or electronic representation of price quotes that provides market information to investors. It first appeared in the 19th century to convey information about trades and prices via information transmitted over telegraph wire.
In 2024, all ticker tape information is electronically displayed but retains its name from the mechanical ticking sound made from the long, narrow pieces of paper generated that stock quotes were printed on.
Key Takeaways
- Ticker tape refers to the paper ribbon upon which stock quotes and trades were mechanically reported and disseminated during the 19th and early 20th centuries.
- In 2024, ticker tape data is digitally displayed.
- The ticker tape contains information about a stock trade including the stock symbol, price and change, and volume.
How to Read Ticker Tape
Each entry on the ticker tape displays the company's stock symbol, the number of shares traded, the price per share at which the trade was executed, an up or down triangle showing whether that price is above or below the previous trading day’s closing price and a value telling how much higher or lower that trade’s price was than the last closing price.
Electronic ticker tapes use green to indicate a higher trading price, red to indicate a lower price, and blue or white to indicate no change. Watching the ticker tape can help investors gauge overall market sentiment. Ticker-tape data also helps technical analysts evaluate stock behavior using charts.
Example
The image below depicts a trade reported for Microsoft Corp.
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- Ticker symbol: The unique characters used to identify the company's stock.
- Shares traded: The volume for the trade being reported. Common abbreviations are K = 1,000, M = 1 million and B = 1 billion
- Price traded: The price per share for the particular trade (the lastbidprice).
- Change direction: Shows whether the stock is trading higher or lower than the previous day'sclosing price.
- Change amount: The difference in price from the previous day's close.
Before information was transmitted electronically, brokers whose offices were closer to the stock exchange received the latest trading data sooner than brokers located further away.
History of the Ticker Tape
The first telegraphic ticker tape was createdby Edward Calahan in 1867, and Thomas Edison improved upon Calahan’s invention and patented it in 1871. The original systems were based on telegraph wires and used specialized keyboards that converted stock data into Morse code that was then read by the machine on the other end.
The quoteswere delivered by messengers, or "pad shovers," who ran a circuit between thetrading floorand brokers' offices. The shorter the distance between the trading floor and thebrokerage, the more up-to-date the quotes were.
Ticker-tape machines introduced in 1930 and 1964 were twice as fast as their predecessors, but they still had about a 15-to-20-minute delay between the time of a transaction and the time it was recorded. Mechanical ticker tapes gave way to electronic ones in the 1960s.In 1996, a real-time electronic ticker was launched.
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How Is Stock Data Prioritized on Ticker Tape?
Most often, data on the ticker tape is prioritized by most active stocks by trading volume, largest price change movers, widely-held stocks, large orders, or stocks with headlines in the news. For opening and closing rotations, a ticker may display the open and close prices of each stock listed in alphabetical order.
What Is a Ticker Tape Parade?
The first official ticker tape parade took place in New York City in 1919 upon the return of World War I veterans to the U.S. Some say that the practice, however, pre-dated this with New Yorkers tossing streamers of ticker tape out of high-rise windows as early as 1886 to commemorate the dedication of the Statue of Liberty.
When Were Stock Exchanges Formed in the United States?
The first stock exchange in the United States was founded in 1790 in Philadelphia. The Philadelphia Stock Exchange was originally named the Board of Brokers of Philadelphia. In 1792, the New York Stock Exchange began.
The Bottom Line
Ticker tape was invented in the 19th century to relay information about stock trades on paper ribbons. The term is used in 2024 although ticker tape data is digitally displayed.
