How Are Ticker Symbols Allotted?

AOL Time Warner will soon be known simply as Time Warner, as the media titan tries to shed some dot-com baggage. As part of the change, the company’s New York Stock Exchange symbol will revert from AOL to the pre-merger TWX. What are the guidelines for picking a ticker symbol?

The ball’s pretty much in the company’s court, as long as its choice isn’t already in use and won’t offend anyone’s delicate sensibilities. The NYSE requires that companies submit their symbol requests at least 20 days before they mail out notification to shareholders and that they list a first, second, and third choice. The exchange rarely gives a thumbs-down to the preferred option. One notable rejection occurred in 1992 and involved Furr’s/Bishop’s Inc., a Texas-based cafeteria operator that wanted to disassociate itself from its floundering holding company, Cavalcade Holdings Inc. But the NYSE denied the company’s application for the symbol FBI, on the grounds that it might cause confusion with a well-known law-enforcement agency, and Furr’s/Bishop’s was forced to remain CHI on the board. (The beleaguered company, later delisted from the NYSE, eventually changed its name to Furr’s Restaurant Group—FRRG on the ignominious pink sheets—and has since filed for bankruptcy.)

Some companies select cheeky symbols, rather than mere acronyms. The father of the trend may be Southwest Airlines, which was first listed as LUV in 1971—a nod to its origins at Dallas’ Love Field. Other semi-clever tags include BID for auctioneer Sotheby’s, FUN for amusement park operator Cedar Fair, and BUNZ for deli chain Schlotzsky’s. It’s a lot easier to come up with something witty if you’re listed on the Nasdaq, as that exchange allows symbols to be up to five letters long; the NYSE sticks with a 3-letter limit.

Stock symbols date back to the telegraph-inspired invention of the ticker in 1867. The most heavily traded stocks were assigned single-letter symbols, to speed up communication; the lion’s share were railroads, like the Atchison, Topeka, and Santa Fe (A) and Brooklyn Rapid Transit (B). For years, companies shied away from the ticker symbol Q, since it was traditionally appended to bankrupt ventures appearing on the market’s board. But Qwest Communications changed all that in 2000, when it became known as Q on the NYSE. It joined such current one-letter symbols as X (United States Steel), F (Ford Motor Co.), and, yes, A—no longer a railroad, but rather Agilent Technologies.

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Explainer thanks J. Taylor Brown of the Hirsch Organization and Meg Ventrudo of the Museum of American Financial History.