Table of Contents
What Is XRT?
Let me explain what XRT means in the stock market. You see it as an extension after a stock's ticker symbol, indicating the stock is trading on an ex-rights basis. XRT stands for ex-rights, which means if you buy the stock now, you don't get the rights to purchase additional shares at a discounted price because those rights have already expired. We print XRT on the ticker tape or display it electronically to keep things clear and prevent any confusion or disputes about where the rights stand.
But XRT isn't just that—it's also the ticker symbol for the SPDR S&P Retail exchange-traded fund, or ETF. This is an index fund that follows a broad-based, equal-weighted index of stocks in the U.S. retail industry.
Understanding XRT
When a stock trades ex-rights, we add XRT as an extension to its ticker symbol. On the ticker, it appears after a dot following the main symbol—for example, if Apex Borax Company has the ticker ABC and it's ex-rights, you'll see it as ABC.XRT.
Rights are financial instruments that let you, as a stock buyer, purchase more shares at a price lower than the current trading price, typically for the first month or two after your initial purchase. These rights are attached to the stock, though sometimes they're detachable. Once that period ends, the rights expire, and the stock trades ex-rights. At that point, the stock usually dips in price for a short time because those valuable rights are no longer part of the deal.
The Function of Rights
Rights offerings attach these instruments to stocks to help you maintain your ownership position if the company issues more shares soon after you buy in. It's similar to a price guarantee on a retail product, where you don't have to worry about the price jumping because it's locked in for a set time.
That's why the stock price drops when rights expire—there's no more guarantee that you can keep your ownership percentage at the same cost, making the stock less appealing and valuable to buyers.
Important Disclaimer
Remember, I'm not providing tax, investment, or financial services or advice here. This information doesn't consider your specific investment objectives, financial situation, or needs. Investing always involves risk, including the possible loss of your principal.
Other articles for you
A forensic audit is a specialized examination of financial records to uncover fraud or misconduct for legal use.
Quantity discounts reduce per-unit costs for buyers purchasing in larger volumes, benefiting sellers by increasing sales and potentially lowering their costs.
Loan origination is the detailed process of applying for and obtaining a mortgage or personal loan, involving steps like pre-qualification, documentation, underwriting, and approval, often with a fee charged by lenders.
A global recession is a widespread economic downturn affecting multiple countries simultaneously, identified by the IMF through various indicators beyond just GDP decline.
Guerrilla marketing uses unconventional, low-cost methods to create buzz and engage audiences for brands or products.
A transferable letter of credit allows the primary beneficiary to transfer credit to a secondary party, ensuring payment in business deals.
Kondratieff Waves are long-term economic cycles in capitalist economies driven by technological innovations, lasting 40 to 60 years.
A holdover tenant stays in a property after their lease expires, and their status depends on whether the landlord accepts rent or initiates eviction.
The times-revenue method values a company by multiplying its revenue by an industry-specific factor, useful for young or high-growth firms but limited by ignoring expenses and profitability.
Neutral trading involves strategies that profit from securities with minimal price movement, neither bullish nor bearish.