Securities vs. Symbols

The ITCH-5.0 protocol suffers from a common confusion in the securities industry. It calls their ticker field ‘Stock’. While it is true that most securities traded on Nasdaq are common stock securities, many are not: Nasdaq also trades Exchange Traded Funds, Exchange Traded Notes, and even Warrants.

And the name of a security, i.e., the string used to identify the security in the many electronic protocols used between exchanges and participants, is not the same as the security. A more appropriate name would have been ‘Security Identifier’, or ‘Ticker’, or ‘Symbol’.

In software we are used to not confusing an object with the multiple references to it. Likewise, we should get used to not confuse stock, which is a security, that is, a contract granting specific rights to its owner; vs. the name of the thing, such as a ticker: a short string used to identify a security in some contexts.

Also, software engineers in the field should be aware that the same security may be identified by different strings in different contexts, e.g. many exchanges used different tickers for the same security, yes, even in the US markets. This is particularly obvious if you start looking at securities with suffixes, such as preferred stock. In addition, the same tickers refers to different securities as time goes by, for example, after some corporate actions.

And outside the US markets it is common to use fairly long strings (ISINs) or just numbers (in Japan) to identify securities in computer systems. And that the string used to identify securities in a market feed may not be the same string used to identify them when placing orders, or clearing.

In short, it behooves software engineers in the field to keep these things straight in their designs, and in their heads too I might add.

References

Haddocks’_Eyes