What is ‘Runoff’
Runoff used to refer to the procedure of printing the end-of-day prices for every stock on an exchange onto ticker tape. Since actual ticker tape isn’t used anymore, the runoff “period” is now used to describe trades at the end of a session that may not be announced or reported until the start of the next session
BREAKING DOWN ‘Runoff’
Ticker tape from the runoff was often cut and saved to function as confetti, to be thrown from the windows above parades, primarily in lower Manhattan. Ticker tape parades often celebrated some significant event, such as the end of World War I and World War II, or the safe return of one of the early astronauts.
Ticker tape was the first electronic communications medium, transmitting stock price information over telegraph lines. It was widely used between for about 100 years, 1870 to 1970. Ticker tape itself was a paper strip that ran through a machine called a stock ticker, which printed abbreviated company names as alphabetic symbols followed by numeric stock transaction price and volume information. The term “ticker” came from the sound made by the machine as it printed.
History of Ticker Tape and Runoff
Newer and better tickers became available in the 1930s, but they still had an approximate 15-to-20-minute delay. Paper ticker tape became obsolete in the 1960s, as television and computers were increasingly used to transmit financial information. Although paper ticker tape is no longer used, the concept of ticker tape lives on in the scrolling electronic ticker boards found on the walls of many offices across the country. They still contain convey the same information. Many of today tickers and ticker simulators use colored characters to indicate whether a stock is trading higher than the previous day’s (green), lower than previous (red), or has remained unchanged (blue or white).
The first stock price ticker system using a telegraphic printer was invented by Edward A. Calahan in 1863; he unveiled his device in New York City on November 15, 1867. Early versions of stock tickers provided the first mechanical means of conveying stock prices (“quotes”), over a long distance over telegraph wiring. In its infancy, the ticker used the same symbols as Morse code as a medium for conveying messages. One of the earliest practical stock ticker machines, the Universal Stock Ticker developed by Thomas Edison in 1869, used alphanumeric characters with a printing speed of approximately one character per second.