Composite tapes are the ticker tapes that are used to print transaction activity on different types of financial exchanges. The composite tape captures real time information and continually prints out current activity on a variety of different markets. The use of ticker tape once served as the most immediate way for regional exchanges to obtain information regarding transactions taking place on national exchanges. Even today, many investors and different exchanges continue to actively use composite tape as the primary means of getting information of securities performance.
The use of composite tape dates back to the early years of stock exchanges and the harnessing of the new power of electricity. During the early 20th century, it was not unusual for large corporations that maintained large portfolios to have a machine on premises to receive composite tape readouts. At the same time, the ticker tape machines made it possible for exchanges all over the world to receive updates of activity occurring in other exchanges. For a number of years, composite tape served as the quickest way to ascertain the current conditions of investments without actually being present on the trading floor of an exchange.
The usual structure for the information conveyed on composite tape is to make note of all transactions involving a given security, no matter which exchange the transactions are taking place. This allows investors to view a broad picture of what is happening with the security across the globe, and get an idea of how the trading is impacting the value of the stock. In many cases, being able to view this much collected data at one time allows the investor to make more informed decisions about what to do with any shares currently held.
Modern technology has provided many other ways to access market activity, but composite tape continues to be utilized in many exchanges and by many investors today. While the ticker tape machines of today are faster and more efficient than in years past, they still tend to function in the same basic manner.