The Corner for Aug. 16, 2013

News of stock transactions are carried on the consolidated ticker tape, which shows information about volume and price seconds after a transaction occurs. The tape has two channels or “networks.” Network “A” covers trades in all stocks, warrants, rights, etc. listed on the New York Stock Exchange, whether executed on the NYSE or on regional exchanges and in what is known as the third and fourth markets.

The “B” Network originally showed American Stock Exchange trades and transactions on regional exchanges for stocks that meet the listing requirements on the American Stock Exchange. On Oct. 1, 2008 the parent of the NYSE, NYSE Euronext purchased the American Stock Exchange. The American exchange name was changed to NYSE MKT.

According to the Securities Industry Automation Corporation, “The Consolidated Tape System Low Speed interface facility consists of two physically distinct ticker lines, Ticker “A” and Ticker “B.” These tickers carry trade reports, index reports, administrative messages, trading activity summary reports and test messages.”

Additionally, the consolidated quotation service provides quotes on exchange-listed securities that are traded by regional stock exchanges. Quotes can be entered on the consolidated tape only by Financial Industry

Regulatory Authority members. Those members identified as designated reporting members must report trades to the service within seconds.

The ticker symbol, which is an abbreviation for a particular stock, appears on the top line; the number of shares sold and the price are shown immediately below. If the trade involves 100 shares, only the price appears.

Trades in multiples of 100 are shown with a single digit followed by an “s.” Thus 3s is 300 shares, 7s is 700 and so on. The “s” is always placed between the volume and price: “6s33” means 600 shares at $33. If the transaction being reported involves more than 10,000 shares, the entire amount appears on the tape: 11,000s35 means 11,000 shares at $35. If more than one transaction is being reported, a period is used to separate them. Thus 24.7s23.50 means 100 shares at 24 and 700 shares at 23.50. A series of trades at the same price is reported in a string: 3s 5s 2s25 indicates separate trades, in sequence, of 300, 500, and 200 shares at 25.

When an error occurs, they are corrected on the tape. There is a variety of error reporting that takes place.

When an error is being reported the tape goes into what is known as “correction mode” as opposed to “trade mode.”

Although all trades are supposed to appear on the tape as soon as possible, a trade will sometimes appear out of order. These late trades carry the symbol “SLD.” Thus: SLD T/2s.35 means that 200 shares of AT&T were traded at $35 sometime earlier. It is not possible to tell how much earlier.

When volume is particularly heavy, the quotation may be “abbreviated by removing the first digit of the price.”

Thus, for a stock where the last trade was 33, the tape might show 4s3 1/2, indicating 400 shares at 33 1/2, etc. The full figure would reappear if the shares went up or down through the next ten-point level, i.e., to 40 or 20.

The symbol “Pr” identifies preferred stocks. Thus, DD+A Pr/86 indicate 100 shares of DuPont preferred stock at $86.

If new shares of an already-traded stock are being issued because of a stock split, these are shown on the tape as W/I, for “when issued.” For example, if AT&T stock is trading at 36 and the corporation offers a two-for-one split, the when issued stock will trade at 35. A sale of 700 new shares after the split would show on the tape as T 7s35W/I.

Finally, there are several miscellaneous messages that are sent down the tape. From time to time, the tape will carry messages not strictly related to a particular transaction, for example, to report: “TRADING HALTED” or “OPENING DELAYED” (or the code OPD) for a particular security. Certain block trades (special offers and special bids, exchange distributions and exchange acquisitions) appear on the tape with the codes SP OFF, SP BID, DIST and ACQ.

Quote of the week: “What is known as success assumes nearly as many aliases as there are those who seek it — Stephen Birmingham.

Bart Ward is the chief executive officer of Ward & Co. Ltd., an Anoka-based registered investment adviser – specializing in the management of stock and bond portfolios in companies which are listed on the NYSE.

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