Long before the computer was created, stock ticker machines used technology to send information across long distances. Stock ticker tape was first created in 1867 by Edward A. Calahan. Edward was an employee at the American Telegraph Company. Through his ingenuity, he designed a machine that transmitted stock prices through telegraph lines. The machine was called a stock ticker and operated with limited space for data. Since there was not a lot of room for information, the stock ticker tape used acronyms and abbreviations to represent the company’s name. It became known as the stock ticker because of the ticking noise it made during operation.
From 1870 to 1870, the stock ticker was used around the world to send stock prices. Each company abbreviation was followed by volume information and share prices. Although stock tickers were extremely popular, they ultimately became obsolete by the 1960s and 1970s. The creation of the television and personal computers made it easier for data to be transmitted. With the advent of the computer, the stock ticker may have fallen into disuse, but its memory lives on. The scrolling electronic tickers that are used on television and in the financial markets are still modeled after the idea of the stock ticker.
The Technology Behind Stock Ticker Machines
As the ancestor of the modern computer, the stock ticker was the first device that could send text over a wire and have the message printed on the other side. The stock ticker machine basically capitalized on the newly invented telegraph machine. Before the telegraph machine existed, all messages were sent through Morse code and were appeared like dots or dashes. With the telegraph machine, typed messages were transmitted through a wire. The stock ticker machines were basically hooked up to a special typewriter that received messages from the telegraph wires. At the opposite end of the stock ticker’s connection, the text made by the typewriter would be released from the stock ticker machine.
To make printing easier, each company’s name was shortened into stock ticker symbols. Like the modern day stock market, these were just a couple of letters that represented the company’s name for anyone who read the stock ticker tape. After that, the stock ticker would list information about the price of the company’s stock and the volume of shares trades. The printer paper used in the stock ticker machine was known as ticker tape.
How Stock Tickers Worked
As energy coursed through a telegraph line, it would enter the stock ticker machine and send pulses. These electric pulses would hit the letter wheel and cause it to turn. Once it reached the right letter, it would stop and print the symbol. Originally, this process of printing was extremely slow. The letter wheels contained 32 symbols and it took 15 steps on average for the next letter to be printed. This meant that only one letter could be printed each second. As a result, hearing the latest stock results from the stock ticker machine could take several minutes or even hours.
Back in 1883, stock tickers used transmitter keyboards. These looked a lot like piano keyboards did at the time. On the stock ticker’s black keys, letters were printed. White keys on the stock ticker contained numbers and fractions.
The Modernization of the Stock Ticker Machine
Between the 1930s and the 1960s, the stock ticker machine became much faster and efficient. The physical stock ticker tape was speeding up and only had a 15 to 20 minute delay behind the general marketplace. Unfortunately, any stock trader knows how large a 15 or 20 minute delay really is. Since the stock ticker machines were still slower than desired, they were made obsolete by a new piece of machinery.
In the 1960s, computer networks and computers were developed that could transmit information much faster than a stock ticker. These computer networks gradually took over the work done by stock ticker machines and the stock ticker stopped being manufactured.
Although they are no longer in use, ticker tapes on computers still contain the same information. On the Internet and television news channels, people can see recreations of the stock ticker. The most popular stock ticker display is situated at One Times Square in New York City.
Stock Tickers Today
In modern times, actual stock ticker machines are no longer used. To commemorate the history of the stock ticker machine, one model of the stock ticker is consistently reproduced for specific collectors and museums. By 1996, an electronic stock ticker was made that could operate without any lag time.
Although the stock ticker machine is no longer used, the information transmitted via other machines is roughly the same. Each ticker tape contains the characters that identify the company. It shows the numbers of shares traded and the price per share. To help people understand the marketplace, it also indicates if the stock is trading higher or lower than the previous trade. If it is trading lower, this is called the downtick while the opposite movement is the uptick. The change amount for the trade is also quoted for the day and this indicates how much higher or lower the stock price is compared to the previous day’s closing price. If it is trading higher, the number will be in green. A lower than the previous day’s closing price will be listed in red while a neutral value will be white or blue.
Stock ticker machines were designed so that investors could have up-to-date information about the stock market. At the time the stock ticker was created, the stock ticker was the most innovative and technologically advanced machine available. Although the financial markets no longer use the stock ticker machine, the stock ticker’s tape format is still used for showing stock values and volumes.