Although the NYSE Euronext (NYSE: NYX) executives had tried to prevent the SEC from approving the Nasdaq Stock Market's right to begin offering three-letter symbols, Bloomberg is reporting the NYSE's efforts have fallen on deaf ears, as the Nasdaq has gained approval to do just that. While the NYSE argues that these measures will increase investor confusion and cause investors to overlook the "rigorous compliance standards" required to list on the NYSE, the SEC has argued that its approval will increase competition between exchanges.

I believe the NYSE was more likely motivated by fear of losses than "compassion" for investors. Companies, for example, who are dissatisfied with the semi-specialist system of NYSE trading can now quickly and easily shift to the Nasdaq's purely electronic means of trading without being forced to change their ticker symbol. For those unfamiliar with the topic, the semi-specialist system is the result of the NYSE's transition from the purely specialist system to a more electronic system. Many argue, and I tend to agree, that the specialist system is much more inefficient than the electronic system of trading because it allows for automatic order fills and the elimination for potential biases. Previously, companies would have been forced to add a letter to their ticker to fulfill the four-letter symbol requirement previously forced unto the Nasdaq. Therefore, the NYSE is now exposed to potential losses in trading revenues, listing fees, and the like.

In my opinion, this probably won't have a tremendous effect on the way U.S. markets run. At first, I will certainly be confused when I see a three-letter ticker trading on the Nasdaq! While order fills are likely to become more and more efficient (think tighter spreads, faster fillers, etc.), I tend to believe the NYSE's transition to the electronic system is enough to appease most of its listing companies.

I was checking up on OMI, an oil tanker company mentioned favorably in Barron's (subscription required) a few weeks ago. It has been on my watch list for quite a while. So I typed "OMI" into the quote search, only to get a leading distributor of medical and surgical supplies-- that's not right. Then I remember the company I was interested in goes by the ticker OMM-- now that's better.

It seems like symbol confusion happens to me about once a month. Harley Davidson (HDI) is changing its symbol to HOG (see Harley Davidson - HDI will be HOG - and living high!) This will add a little confusion for a while, but I bet there are millions of people that have looked up HDI, but who actually wanted Home Depot, ticker HD.

Another one I have remembered wrong in the past is Alcoa Aluminum which uses 'AA' for it's stock ticker symbol. This makes sense, but what comes to mind first is American Airlines, which uses 'AA' for their logo, website (AA.com), and in most promotional material, and is actually AMR. 'AA - American Airlines' is also used as a slang term for a pair of aces in the hole in hold-em poker. 'WM' is Washington Mutual, not Waste Management which is 'WMI', or Wal-Mart which is 'WMT'

I'm sure ticker confusion is a common enough occurrence and that most of the time investors find the correct stock ticker for the company in which they are interested. Still, with so many millions of trades daily and so many of them done on low cost on-line trading sites by people with limited experience, I wonder how often someone does not catch the mistake.

Anyone else have ticker confusion or trades that they wanted busted due to ticker error? It's always worth double-checking before confirming a trade.

Sheldon Liber is the CEO of a small private investment company and the vice president for Design and Research of an Architecture & Planning firm.