H: What It Means, How It Works in Bonds Trading

What Is H?

The letter H appears as the last character in the symbols of certain stocks traded on the NASDAQ stock exchange. This fifth-letter identifier is attached to the issuing company's stock when it sells securities with a second convertible bond.

Understanding H

NASDAQ-listed securities historically had four characters. Since 2007, NASDAQ-listed stocks may have as little as one letter in their ticker symbols.

And, some symbols have five letters. If a fifth letter appears, it identifies the issue as other than a single issue of common stock or capital stock.

In other words, fifth-letter identifiers are used to denote the existence of additional circumstances related to a company's stock.

Other common fifth-letter identifiers include A (class A shares), B (class B shares), G (first convertible bond), K (non-voting shares), Q (bankruptcy), W (warrants), and Z for miscellaneous.

Each letter of the alphabet has a specific NASDAQ meaning. When a stock has a fifth letter after its ticker symbol, further research is needed to determine why the letter has been added.

Confusion is justifiable. For example, the letter H is also the stock ticker symbol of Hyatt Corp. but Hyatt is not an H stock.

About NASDAQ

The National Association of Securities Dealers Automated Quotations, or NASDAQ, is a global electronic marketplace for buying and selling securities as well as the benchmark index for U.S. technology stocks.

NASDAQ was created by the National Association of Securities Dealers (NASD) to provide investors and traders with a computerized, speedy, and transparent system. It has been operating since Feb. 8, 1971.

The term NASDAQ is also used to refer to the NASDAQ Composite, an index of more than 3,000 stocks listed on the NASDAQ exchange that includes many of the world’s foremost technology and biotech giants.

The NASDAQ computerized trading system was devised as an alternative to the inefficient specialist system, which had been the prevailing model for almost a century. The rapid evolution of technology made its electronic trading model the standard for markets worldwide.

As it was a leader in trading technology, the world’s technology giants chose to list on the NASDAQ in their early days. As the technology sector grew in prominence in the 1980s and 1990s, the NASDAQ became the most widely followed proxy for this sector.

NASDAQ Three-Tiered Market

The Capital Market is an equity market for small-cap companies. Listing requirements are less stringent than for other NASDAQ markets that list larger companies with significantly higher market capitalization.

The Global Market consists of 1,450 mid-cap stocks that meet NASDAQ's financial and liquidity requirements and corporate governance standards.

The Global Select Market is a market capitalization-weighted index made up of 1,200 US-based and international large-cap stocks that represent the Global Select Market Composite.