At the New York Stock Exchange in the early 1920s, a swarm of men jostling around a small dome-topped stock ticker caught the attention of a mustachioed British immigrant, Percival N. Furber. He saw that the broker who did the most elbowing got the first look at the ticker tape, to his considerable advantage.
That gave Furber an idea.
Thus was born his Trans-Lux Movie Ticker, a camera that projected Western Union's skinny, never-ending stream of stock prices onto a screen that everyone at the exchange could see simultaneously. Since then, the tale of the ticker has informed, enriched and impoverished investors.
But while the ticker is now a fixture on television, in brokerage firms and even on the sides of city buildings, its fundamentals are a mystery to many. Does it list every trade? Is it a running record or delayed? Here is the other tale of the ticker:
Q. How can tickers keep up with today's heavy trading volume?
A. In the mid-1920s, fewer than 500-million shares traded on American exchanges each year. On a single day in 1997 _ Oct. 27, when the Dow Jones Industrial Average fell a record 554 points _ more than a billion shares traded on Nasdaq alone.
Even on an average day on Nasdaq, "if a broadcaster tried to provide all the day's transactions, the tape would speed by in a blur," said Larry Mincer, president of Video Design Software, the company that gives CNBC, the cable network, the ability to receive stock prices from the exchanges.
The American Stock Exchange, with average trading of 24-million shares a day, can usually get most of its transactions onto a real-time ticker, said William T. Quinn, the exchange's vice president for market operations and trading floor systems and technology. But the tape for the New York Stock Exchange, which averages 525-million trades a day, may capture only 20 percent of a day's transactions, Mincer said.
One solution came in the early 1960s. New technology raised the ticker's speed from 500 characters a minute to 900, where it remains today _ the maximum speed that can be read comfortably.
But to deal with today's heavy trading volume, "the data providers filter the transactions," said Jack Feder Jr., director of Nasdaq's Wall Street site. In other words, many transactions never make it onto the tape, cut off by software that deletes them according to various criteria.
For example, filters eliminate trades of the same price or within a tight range. Thinly traded stocks or small transactions also may be cut. And on busy days, the definition of a small trade may broaden.
CNN/FN, another financial cable network, filters trades to provide frequent alphabetical summaries of the most active stocks and the biggest gainers and losers. In the course of a day, "newsroom producers also make editorial decisions about including stocks in sectors that are in the news," said Paulette Song, a spokeswoman for CNN/FN.
Q. How real is a "real time" ticker?
A. Broadcasters and brokerage firms that have contracts with Standard & Poor's, Dow Jones and other data providers can see a trade seconds after an order is made, but they pay for the privilege. A tape with a 15-minute delay, however, is available free on many Internet sites and on television.
CNBC broadcasts real-time trades for the Big Board, but both its Nasdaq and American Stock Exchange tapes are delayed 15 minutes. CNN/FN, however, provides real-time trades from all three major exchanges.
Q. Can companies pick their own ticker symbols?
A. On the major exchanges, companies have at least some say about their ticker symbols. But not always. Consider the Nasdaq company with the symbol UGLY.
"Actually, our first choice was DUCK," said Gregory B. Sullivan, president of Ugly Duckling Corp. in Phoenix, which sells and finances used cars.
But DUCK was already taken, "so after considerable discussion we settled on UGLY," Sullivan said.
Q. Who is the big supplier of today's tickers?
A. Furber's Trans-Lux Corp. The company, based in Norwalk, Conn., went public in 1925 and is one of the oldest on the American Stock Exchange. Besides its stock-exchange business, "we were a major supplier of ticker tape for parades," said Michael Mulcahy, the company's executive vice president.
The ticker tape and the domed machines are long gone, of course. But Trans-Lux has stayed on top of the technology in its field and is now the world's chief supplier of light-emitting diode ticker displays in the financial market, said Victor Liss, the company's chief executive.
The company has also diversified. In the 1950s, its screen-projection expertise blossomed into a movie theater chain; it now owns 40 screens at 10 sites in the Rocky Mountain states. It also makes electronic signs for casinos and theaters and, beginning in 1992, it moved into other outdoor signs, like scoreboards and the time-and-temperature signs seen on many banks.
William Scovin of Loewenbaum & Co. is the sole analyst following Trans-Lux and is a fan. "If you can get TLX, accumulate it," he said, noting that half the company's 1.3-million shares are owned by insiders. "Tremendous asset value is locked in the company," he said, because its core business is renting its signs, which may remain in place for many years and need only minimal maintenance.
Trans-Lux had $45.3-million in sales in 1996 and its stock, which closed Friday at $14.06\, has gained about 25 percent in the past 12 months. Liss expects last quarter's earnings to be in line with estimates.
Q. What will the ticker tape of the future look like?
A. Perhaps like the fancy new version at Nasdaq's quarters on Wall Street. It has full-color company logos in place of letter symbols. But the new ticker won't be on CNN/FN any time soon; Nasdaq is waiting for high-definition television.
Q. What has happened to the tickers of the past?
A. "We sold two stock tickers for $15,000 each during the past Christmas season," said Marie Alberti, who runs the sales division of R.M. Smythe & Co., a Manhattan company that sells Wall Street antiques. "We can get $5,000 just for the glass domes."
A couple of years ago, Smythe got $5,250 for something no one wanted to see when it was new: a few feet of ticker tape from the ugly opening of business on Oct. 29, 1929.