Increasing Competition for Single-Stock ETF Ticker Symbols

Running Out of Ticker Symbols

According to Gavin Filmore, chief revenue officer of Tidal Financial Group, the competition for ticker symbols has never been more intense. He compared the situation to 'cybersquatting', where market participants are constantly securing tickers, particularly as certain sectors or themes become more crowded. This comes in response to the increasing scarcity of ticker symbols for ETFs on U.S. markets.

The High-Stakes Challenge

Securing a catchy ticker for ETFs has become a significant challenge in the $10 trillion market, particularly for funds tracking individual stocks. With U.S. exchanges allowing only four-character tickers, the potential combinations theoretically reach 456,976. However, for single-stock ETFs, the options are considerably reduced since the ticker must include the stock symbol it's based on.

Importance of a Snappy Ticker

According to a report by Bloomberg, a snappy ticker is more than just branding in the crowded ETF space. It can lead to lower spreads and better liquidity. This is why issuers are scrambling to secure unique symbols, sometimes resorting to hoarding, as the competition intensifies.

Stockpiling Symbols

Matthew Tuttle, CEO of Tuttle Capital, stated that there are individuals who are going to stockpile symbols. He added that on good names, there could potentially be an issue. He also mentioned the importance of having a way to differentiate between the bull and the bear if both sides are represented.

Increasing Difficulty in Securing Tickers

Will Rhind, CEO of GraniteShares, expressed that it's becoming harder to secure tickers for single-stock ETFs as exchanges increasingly reject their requests due to reserved or delisted symbols. Some suggest that expanding the character limit could provide issuers with more flexibility, as four-letter tickers have dominated new ETF launches for almost 15 years.

NASDAQ's Stance

However, NASDAQ doesn't seem to have plans to expand the character limit. Jeff Thomas, its chief revenue officer and global head of listings, stated that there are no current concerns about a ticker shortage. He added that they occasionally receive questions from companies about how to get more creative with tickers, such as including numbers in addition to letters.

Adding Numbers to Tickers

Rhind concluded by expressing his personal belief that adding numbers to tickers would be a good addition. He said that for leveraged products, this could make a significant difference. All their products in Europe follow this naming architecture, so he believes it would help and provide some additional breathing space for those who find it difficult to find tickers.

Bottom Line

The competition for single-stock ETF ticker symbols is heating up, with some market participants resorting to stockpiling symbols. While some suggest expanding the character limit or adding numbers to tickers, exchanges like NASDAQ do not seem to share these concerns. With the increasing demand and limited supply of catchy tickers, what do you think about this situation? Feel free to share this article with your friends and discuss it further. Remember, you can sign up for the Daily Briefing, which is delivered every day at 6pm.