What is XRT?
An extension for stocks is placed after the ticker symbol, XRT. It suggests that ex-rights trading is taking place for the store. (The term ex-rights is shortened to XRT.) Ex-rights indicate that when the rights have expired, the stock buyer can no longer acquire further shares at a discounted price. To clarify and prevent misunderstandings about the exact boundaries of the rights that still apply, XRT is written on the ticker tape or shown on the electronic ticker.
The SPDR S&P Retail exchange-traded fund (ETF) also has XRT as its ticker symbol. This index fund follows an equal-weighted, broad-based equities index in the U.S. retail business.
Recognizing XRT
The ticker symbol XRT has been added as an extension for stock trading ex-rights. The extension is appended to the ticker after the ticker symbol and after a dot. For instance, the ticker for an ex-rights transaction of Apex Borax Company stock would read “ABC.XRT” on the ticker.
A financial instrument known as rights allows the buyer of a stock to buy more shares during the first two or three months of ownership at a price below the market price. Although these rights are sometimes refundable, it is said that they are “attached” to a stock. The rights attach for a certain amount of time, after which they expire; the stock is then considered to be exchanged for “ex-rights.” A stock often trades for less than it has for a short while after it reaches the rights expiry term and becomes ex-rights since the advantageous rights are no longer tied to it.
The Role of Rights
If a company releases extra shares soon after the buyer acquires them, attaching rights to the stock via a rights offering helps purchasers keep their stake. It works like a price guarantee for retail purchases, where the buyer is relieved of the concern that the product’s price may soar since it is guaranteed for a particular duration.
Because there is no longer an assurance that the buyer can keep an ownership percentage at the same price, the cost of the stock decreases when the rights expire. The buyer will find the store less valuable as a result.
Conclusion
- To indicate that a stock trades on an ex-rights basis, the extension XRT may follow the ticker symbol.
- Ex-rights indicate that when the rights have expired, the stock buyer can no longer acquire further shares at a discounted price.
- To clarify and prevent misunderstandings about the exact boundaries of the rights that still apply, XRT is written on the ticker tape or shown on the electronic ticker.
