Category

Wall Street Slang


Stock Market Lingo & Investor Trite Expressions

 

All the Boats RiseWhen the tide comes in, all the boats rise. When the stock market is quickly rising, there is a tendency for most stocks to increase in value due to over-optimism. The opposite is, When the tide goes out, all the boats sink, which is due to over-pessimism.
ARGAggressive revenue growth.
Bear HugWhen a company offers to buy another company at a signficant premium. The intent of a high offer price is to entice shareholders of the target company to vote in favor of a merger, and against its management. Usually considered a hostile takeover offer.
BearishTo believe the market will go down.
Black MondayThe day the stock market crashed on October 19, 1987.
Black FridayThe Friday after Thanksgiving, which is a very popular shopping day for retailers. In the black means to be profitable. A very recent and annoying cliché, as it conjures up memories of 1987 and 1929.
Black TuesdayThe day the stock market crashed on October 29, 1929.
Bottom FishingAfter a large sell-off or drop in the market, a slang term for picking oversold stocks.
BullishTo believe the market will go up.
Buy & HoldA foolish method of investing, when you buy a stock and completely forget about it indefinitely. Jim Cramer's term Buy & Homework, or to evaluate your portfolio periodically, is more practical.
Castles in the SkyWhen stock prices are extremely overvalued, and not justifiable by future increases in earnings. 1987 and 1999 are examples, just before large market drops.
Chasing Returns(1) Taking on more risk to gain a higher return. Banks buying more SIVs (risky debt) to gain higher returns had greatly contributed to the liquidity crisis of 2007-09, as many of the SIV funds became insolvent. (2) When a group of stocks or the entire market has experienced a high return, and investors invest more into this group just for that reason. Often P/E Inflation occurs as a result, when such stocks go up in price while their earnings do not go up quite as much. [P/E = price divided by earnings.]
Closing BellWhen trading stops on the New York Stock Exchange and Nasdaq each day, a bell is rung to signal the event.
CrashA large sell-off (-10% or more) in the stock market in a single day.
Crowding OutWhen the Federal Government incurs massive budget deficits, it must borrow tremoundous sums of money. This effectively "crowds out" private businesses from borrowing in the capital markets as there is less money available for loans.
Dead Cat BounceAfter a stock (or even the entire market) has dropped substantially, there is often a moderate bounce to the up side. This bounce may be caused by value investors believing the stock had become undervalued at this beaten down price, or by short sellers covering their positions as shorting was compounding on the way down.
DovishWhen the Federal Reserve Governors imply that interest rates may be going down soon. The opposite of hawkish.
Field BetBuying a group of stocks in the same industry, most often when a group is unprofitable and oversold. The theory is that some companies may go bankrupt, but one or more may survive and incur large gains in the stock price.
Flash CrashA crash in stock prices caused by computerized automated selling that can result in a 5% to 10% drop in the market within an hour or two. A precursor to such an event is often extremely negative market futures just before opening. Volatility is extreme during Flash Crashes due to automated buying and selling. Large trading errors have also caused Flash Crashes, like erroneously selling 1,000,000 shares of a stock, instead of $1,000,000's worth.
Gentlemen Prefer BondsAn obsolete saying used in a long-term bear market for stocks. Bonds tend to outperform stocks during recessions.
HawkishWhen the Federal Reserve Governors imply that interest rates may be going up soon. The opposite of dovish.
Joe Granville WednesdayThe Dow Jones Industrial Average hit 1000 on Tuesday January 6, 1981, after not reaching 1000 since January 26, 1973. On Wednesday January 7, 1981, Joe Granville announced in his investment newsletter to "Sell Everything!". The Dow dropped by more than 7% in the next six weeks, which made him quite famous. The Dow kept falling until August, 1982.
Limit DownPrice controls on futures contracts, which halt trading after a large drop.
Merger MondayMergers, or companies buying other companies, often consummate a deal over a weekend, and then publicly announce it on a Monday.
Misery IndexThe Unemployment Rate and the Inflation Rate added together. The term was made famous by President Jimmy Carter during his 1976 presidential campaign.
Nifty FiftyA group of 50 large cap overvalued stocks that greatly influenced the market in the 1960s.
Opening BellWhen trading starts on the New York Stock Exchange and Nasdaq each day, a bell is rung to signal the event.
Painting the TapeWhen a group of investors illegally move a stock by trading it all at the same time. This happens every day, just watch the tape of most active light volume stocks, but don't get sucked in. Day trader newsletter emails can cause such moves.
Quadruple Witching HourThe final hour of trading on a Friday when stock index futures, single stock futures, stock index options, and stock options all expire. This happens on the third Friday in March, June, September, and December. This used to be called the Triple Witching Hour.
Random WalkA 1970s author created a portfolio of stocks by throwing darts randomly at a newspaper stock price table. The dart portfolio outperformed the collective results of a sideways market.
Rubber Band EffectAfter a large sell-off in the market, there is a tendency for the market to bounce back right away. It is caused by computerized trading programs. It's also known as a V rally due to how it appears on a chart.
Sell in May and Go AwayThe market is often seasonal, rising in late winter at times. The market can run out of steam in May, with stock prices falling, causing the Summer Doldrums.
ShimmingStealing a few pennies from trades by specialists or market makers. See Trading Ahead.
StagflationA state of the economy when Unemployment is high and Inflation is high. Quite often, stagflation is caused by massive deficit spending by the Federal Government. This deficit spending reduces private sector output with higher inflation.
Summer DoldrumsStocks tend to remain flat or drop during the summer. Many people are on vacation, with trading volume usually dropping also.
Trading AheadUnethical and illegal trading by specialists or market makers. A specialist may buy a stock for themselves from John Q. Public even though a better price is available from another seller. The specialist can view bid and ask prices and then manually mis-match them, or see ahead to a less favorable price. It happens all the time in this editor's experience, by observing how long it takes for a stop order to execute after the stop price was reached. This practice is a form of shimming.
Trading ImbalanceA situation where a large block of stock is put up for sale, but not enough buyers are available for purchase, and a market maker is unable to buy the imbalance. Lightly traded and tightly held stocks are considered temporarily illiquid during such imbalances. On occasion, a trading halt is put into place until enough buyers are available to purchase the deficit. On rare occasion, a handful of buyers can buy the stock at a huge discount if the stock was not halted during the imbalance. On the New York Stock Exchange, large stocks usually have a "delayed open" for such imbalances, as a trading specialist will fill the order by lining up buyers for the block, and then open trading for the stock for the day.
Triple Witching HourThe final hour of trading on a Friday when stock index futures, stock index options, and stock options all expire. This happens on the third Friday in March, June, September, and December. See Quadruple Witching Hour.
UnicornA privately held company that had quickly reached one billion dollars in revenue, and is now considering going public. Such companies appear to be "mythical" like a unicorn due to their swift growth, and investment banks may actually hesitate to bring them public. Fast growing large companies awaiting favorable market conditions to go public are often referred to as unicorns.
V RallyAfter a large sell-off in the market, there is a tendency for the market to bounce back right away. It is caused by computerized trading programs. The term derives from how the move appears on a chart. Also known as the Rubber Band Effect.

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