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Ticker Tape Digest takes its name from the "old ticker tape" that permeated Wall Street around the turn of the century - and in some ways even today. Although technology has changed to what we now know as "cyberspace," the basic premise of analyzing tape action has not. The idea is to watch the flow of money into and out of stocks by studying price and volume.
An investor still needs to have information and the ability to analyze the tape to find the most important thing - "unusual trading." Financial news is reported by all the major wire services from Dow Jones to Reuters. They do a great job.
However, the nature of investing is such that the "Tape" often times will "discount" news. That means the price of a stock will rise or fall in anticipation of news. We at TTD have seen it time and time again.
Although it may seem that tape watching is short-term oriented, today's 21st century trading is such that stocks can move up and down 25% to 50% in a very short period of time. The smart investor will use every tool and type of analysis to improve his understanding of what is going on in the market place.
The Ticker Tape deals with price and volume action in a stock. By studying that an investor can have a better understanding of what's really going on in the market. Many people talk, but money talks the loudest. It's on the tape. Ticker Tape Digest's job is to help investor's read it.
Around the turn of the century, most brokers who traded at the New York Stock Exchange maintained an office near the exchange. Before the ticker, reports of sales and purchases were recorded by messenger boys, known as "pad shovers," who constantly ran between the trading floor and brokers' offices.
No matter how quick they were fluctuations in prices often occurred during the 15 to 20 minutes it took them to complete their circuit. The accuracy and speed of the new ticker tape report was recognized immediately as an important assets to trading.
Several ticker companies were permitted to station "reporters" on the trading floor to record sales. Their reports went to company operating rooms near the trading floor, where the name of the stock, the price and the number of shares traded were typed on a keyboard.
Elaborate electric circuitry (at that time) transmitted the keyboard movements and activated indicator wheels in local tickers. The wheel printed letters and numbers on an easy-to-read paper - later to be know as the "Ticker Tape."
By the 1880s, there were about a 1,000 stock tickers installed in the offices of New York bankers and brokers. In 1890, members of the exchange agreed to create the New York Quotation Co. in order to buy up all other ticker companies. The move was done to provide accuracy of reporting of price and volume activity.
Another technology development that substantially affected the brokerage business was the telephone. The first telephone was introduced to the exchange in 1878 only two years after Alexander Graham Bell invented it. The telephone eliminated the need for messengers. With the telephone, the business of trading stocks soared.
In a way, technology has not change the basic principles of investing very much from 100 years ago. Investors still get stock prices and volume. The "Ticker Tape" still endures as it is carried by many TV stations and Wall Boards in brokerage houses.
The difference today is that over 10,000 stocks are traded versus just a couple hundred years ago. More people have access to the information. Also, the Ticker Tape has a brother sometimes referred to as the "Broad Tape" - that is the DJ news wire. The DJ wire, though, is giving way to some extent to the transmission of financial information over television.
Going into the 21st Century - the World Wide Web - is going to explode as a powerful place to find financial information. The breadth of information and analysis is growing every day. No longer will investors be confined to only a few publications to get good investment ideas. They will have an opportunity to seek new sources of information with fresh ideas.
Ticker Tape Digest is in the vanguard of the new Internet technology. At TTD, we believe the "tape talks to those who listen." Our goal is to study the tape and to give our readers the best analysis of what is really going on in the market place.
It takes a leap of faith to believe the "Tape" before news comes out, or when the "Tape" acts contrary to what we think it should do when news is reported. However, it is just that type of aggressive thinking that can help an investor to be very successful in the market.
TTD plans to expand its web page in the future to give readers more insight into what is really happening in the stock market. Our goal: To help investor make excellent investment decisions and get a greater return on their investment.
|Good sources of information on the Ticker Tape and its trading use|
1. Understanding The Ticker Tape - Investopedia
2. Exchanges - Ticker Tape Terminology - The Investment FAQ