What is a Stock Ticker?

A stock ticker is a means by which stock prices are conveyed in real time to investors. At one time, a stock ticker was a machine which used telegraph technology to transmit this information onto paper or "ticker tape," but with the advent of television and computers, today's stock ticker is a simulated ticker display.

Thomas Edison was quite possibly the most influential inventor in stock ticker technology, but the invention had its beginning in 1867 with S.S. Law's Gold Indicator. The Gold Indicator was used by the Gold Exchange on Wall Street. The machine displayed the current price of gold on two sides: one faced the street for customers to see, and the other faced traders inside.

Shortly after Law's invention came Edward A. Calahan's Stock Printer. This machine was the first stock telegraph printing machine that printed the stock prices onto a tape. The ticking sound of the machine earned it the name stock ticker, and it stuck.

Over the next century, Thomas Edison and other ingenious inventors developed the technology that revolutionized the way investors monitored their stocks. The last mechanical ticker was introduced in 1960, but was eventually replaced by modern stock tickers that are powered by computers and have electronic displays. Now, in addition to the continuous stream of television news channel stock information, stock tickers can be customized for your personal computer, PDA or cellular phone.

The main components of the stock ticker include the following: the Ticker Symbol, which is the symbol of the stock; the volume, or how many shares have traded that day; and the price at which the stock is trading. The next amount listed is how much the price has changed since last traded, followed by an up or down arrow signifying whether it traded up or down. The last amount is the amount by which the price changed since the last close.

Colors are another component of many stock tickers. Generally, green is used when the stock is trading higher at last close and red if it is lower. Blue or white is used if the stock price is unchanged. Of course, due to the fact that millions of trades on thousands of stocks are transacted on a daily basis, a stock ticker cannot possibly keep up. Because of this, only selected trades and stocks are shown on a stock ticker.

The advent of modern technology has replaced the literal leg work that was once so crucial to the stock market, while giving investors all over the world the information they need to make informed trades.