What is Runoff in the share market?
The stock market is like an enormous ocean involving investors, companies, stock exchanges, and others under one umbrella. Billions of transactions happen in the stock market daily. Keeping a tab on the end-of-the-day prices of various stocks can be tedious unless there’s a watching body behind the market. Without the trade information and other data related to the company’s stocks, it’s challenging to make the right move.
That’s when the concept of runoff in the share market was born. Here, all the trades are recorded digitally using ticker tapes. These are a spin-off of analog tapes, where at the end of the trading day, every stock price gets posted on this ribbon paper electronically. Let’s jump ahead to know more about what runoff in the share market means.
What is a Runoff in the Share Market?
Earlier, the stock market used to record end-day session trades in a digital format with the help of ticker tapes. When the trading day comes to a close, the prices of the last trades will be exhibited on these tapes. This helps investors or traders to look at the performance of the market during the close, which is the opening price for the next day.
Ticker tapes were the past, and runoff was the process of conveying prices using these tapes. They operate on the same analogy of representing the trade scores at the end of the session. It reports the final stock price of the company shown on the stock exchange after the trading. The runoff in the share market also indicates the rise and fall of trade prices.
History of Runoff
Edward Calahan is the creator and investor of stock ticker tape in 1867. He designed this idea for the Gold and Stock Telegraph entity in New York. Then, in 1871, Thomas Edison invented the Universal Stock Printer, which again came as a handy resource to record sports information or data.
The name ticker was given to the invention for the sound it produced while printing in the machine. The ticker tape models existed in the market till the 1960s. Later, since the advent of advanced technology, every single stock market operation data is broadcasted openly on the stock exchanges. With one tap on your digital device, you can visualize the whole market across places. Whether it’s the NASDAQ stock exchange or NSE or BSE, you find everything you need on the web.
Unlike before when the ticker information used to be disseminated in newspapers for review on the other day, today, the runoff in the sharemarket shows the ups and downs in the market in the form of colour symbols or signals. The green colour indicates that the current stock price is more than yesterday's close price. The red states that the current stock price is trading less than the earlier day’s price. Finally, the blue, black or white colour implies that nothing has changed yet in the market since yesterday’s close. Today, there are candlestick charts, bar charts and many other charts that represent the oscillations in the stock market.
Final Words
There are billions of trades happening every day and no one knows which data is pivotal and which isn’t. Thanks to the runoff in the share market, a procedure that helped to write and print stock market end sessions on every closing day of the trade. Through ticker tape, the stock information process was channelized and made available to the end stakeholders. By glimpsing the runoff in the share market, traders get to know the market sentiment and the overall performance on that day.