Ticker tape is a strip of paper or digital data that shows the current prices of stocks, giving investors an insight into how the market is performing. Ticker tape originated in the 19th century when ticker machines printed stock symbols and numerical data on paper tape based on telegraph wire transmissions.
Key Takeaways
- Nowadays, ticker tapes are digital, with electronic symbols scrolling in a linear fashion, just like the archaic analog systems.
- A ticker tape displays the stock symbol, price and change, and volume for a given trade.
- Today, ticker tape is typically seen in parades celebrating important occasions, taking place through urban streets.
What is Ticker Tape?
Ticker tape, which provided stock price information over telegraph lines from 1870 to 1970, was the first electrical system designed exclusively for financial communications. This technology used a paper strip and a machine called a stock ticker, printing company names as letters plus numbers that represented stock price and volume. The word “ticker” originated from the noise made by the machine as it printed.
The ticker tape enabled financial markets to receive data from trading floors instantly and over long distances. By the 1960s, paper ticker tape was no longer used as a television, and computers were used to deliver financial information instead. The stock ticker is still popular, especially in electronic form on financial TV shows and brokerage firm walls.
How Ticker Tape Was Created
The invention of the telegraphic printing system by the Royal Earl House in 1846 was a major breakthrough in communication technology. However, the early models were fragile and unreliable, requiring hand-cranked power and often going out of synchronization between sender and receiver. It wasn’t until David E. Hughes improved the design with clockwork weight power in 1856 that it became viable for commercial use.
Before the invention of the ticker, stock prices had to be delivered via written or verbal messages. This was a slow process, and as individual quotes have a very brief useful time span, they were generally not sent long distances; instead, aggregated summaries were sent one day at a time. The increase in speed provided by the ticker allowed for faster and more exact sales, revolutionizing the way stock prices were communicated around the world.
Benefits of Ticker Tape Technology
Siemens & Halske, a German company, developed the first stock ticker machines in the late 1800s. These machines were an ancestor of the modern computer printer and used the technology of recently invented telegraph machines to transmit text over a wire to a printing device. The advantage of this was that instead of dots and dashes of Morse code, readable text was outputted.
To use the machine, a special typewriter designed for operation over telegraph wires was used at one end of the connection while the ticker machine printed out text typed on the typewriter at the other end. The machines printed out a series of symbols (usually shortened forms of a company’s name) followed by brief information about that company’s stock price on a thin strip of paper called ticker symbols. This technology allowed for faster communication between brokers and traders and had a range of up to 400 km.
Conclusion
By reading ticker tape, investors can obtain an understanding of the stock market’s current prices. Although digital now, the term “ticker tape” still remains from the days when analog devices made a ticking sound and stock quotes were printed on long strips of paper.
Ticker Tape FAQ
Who invented the ticker tape machine?
In 1867, Edward A. invented the first ticker tape machine. Thomas Edison built upon the work of Calahan to improve it.
How do you read ticker tape?
Ticker tapes display a stock’s ticker symbol based on the exchange. Besides the symbol, there’s information on the most recent trade including the price, trade volume, whether it was a positive or negative change, and the deviation from the opening value.
What was the first Ticker Tape Parade?
New Yorkers celebrated the dedication of the Statue of Liberty with ticker tape in 1886, marking the first unofficial “ticker tape parade.” The tradition was officially inaugurated in 1919 when World War I veterans returned to the U.S. from abroad and were greeted by a giant parade of paper streamers.
