When you first begin investing in micro or nano cap stocks you may have a difficult time finding information on the company that you want. That's because much of the time the penny stock symbols are used instead of the company names. If you are unaware of what the symbol is, and can't find it immediately, there are ways of looking it up. You can start at Yahoo finance where there is a symbol look up tool. Some of the smaller companies may not be there, so your second option is to go the OTCBB site. Often putting the name in a search engine brings up pages that refer to the company and give the symbol.
Stock symbols started shortly after the telegraph in 1844. The symbol was shorter and easily transmitted in just seconds over the telegraph but the longer names proved more time consuming so the telegraph operators started a shorthand version. Ultimately that shortened version became the symbols that we know today.
If you've ever wondered why some companies on the OTCBB have just four letters in their penny stock symbols and others have five, the answer is quite simple. The fifth letter gives special information about the company or the stock. For instance, an A or B indicates a class A share or Class B share. The letters indicate special rights given to each share, which varies from company to company. Most of the extra letters give additional information to the purchaser of the stock, some give important information that is necessary in the decision to purchase. For instance, an E at the end indicates that the company is delinquent in filing SEC requirements. Q is the most important letter, however, since it indicates that the company is in bankruptcy.
When you invest in the stock market and use penny stocks as the primary method to make money, you need to use the symbol to find out pertinent information about the stock, particularly the price and activity level. At the end of each day, the OTCBB and other sites indicate the gainers, losers and most active traders by the penny stock symbols. It takes only a second to check if you know the symbol of the stocks that you're interested in purchasing.