Tag: fear index

A Must: Understand Your Stock Market Lingo

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Are you currently acquainting yourself with the stock market? Undeniably, you have to learn the basics. Like any other skill, learning the nitty-gritties is essential. Go over these several common stock market terms that you need to know as you tread on the journey of becoming a well-versed trader.

Here goes the list of expressions you need to know now.

  1. All the Boats Rise

 This is associated with the conception that improvements in the economy in general will then be beneficial to all participants. Another one is, when the stock market quickly escalates, there is a higher probability that the value of most stocks increase in value, which generally is brought about by over-optimism.

  1. Blue Chip Stocks

To refer to large and leading industries you can use this term. These companies have a stable record of substantial dividend payments and have a reputation of being a well-established and financially sound company operating for many years. They are usually market leaders or those belonging to the top three spots in its sector.

The expression was actually from a casino term, wherein blue gambling chips are regarded as the highest denomination chips being used.

  1. Bear Hug

 A bear hug is the name given to an offer made by a certain company when it wants to buy the shares of another company. The offer is regarded as an overly generous one since the price given is higher per-share than the original value of the company.

This term is being used only if the target company is unwilling to sell its shares.

  1. Black Monday

This refers to the day when the Dow Jones Industrial Average went down by 22% in a single day. There have been theories explaining that the crash happened due to mass panic.

The stock market crashed on October 19, 1987.

  1. Black Tuesday

This expression refers to October 29, 1929 or the day when sellers due to panic traded about 16 million shares on the New York Stock Exchange. It was also noted that Dow Jones Industrial Average decreased by -12%.

The Black Tuesday is known to be the beginning of the Great Depression.

  1. Cash Out

The moment when an investor decides to sell a stock knowing that the company where he or she invested has lost its good fundamentals such as increasing profits, low overhead and consistent earnings.

  1. Crash

It is often an instant and often unforeseen drop in prices of stocks. It can result from major disastrous events, economic crisis or most commonly, due to public panic.

  1. Dovish

This term refers to monetary policies involving low interest rates. The term was derived from the gentle and calm nature of the bird. Its opposite is termed as hawkish.

  1. Exchange

It is a place where different investments are being traded. The famous ones are the New York Stock Exchange and the NASDAQ, which are both located in the United States.

  1. Fear Index

The other term called to the VIX index. It usually measures the fear investors perceive in the market due to volatility concerns.

  1. Merger Monday

Usually, after the weekend, there are mergers or companies who bought other companies. The deals are usually closed over the weekend and are publicly broadcasted on a Monday.

  1. Misery Index

This is the sum of the unemployment rate added to the inflation rate. This term was popularized by President Jimmy Carter on his presidential campaign back in 1976.

  1. Summer Doldrums

In the summer months, since people are going on vacations, trading volume is noticed to be dropping as well. This term describes the time where stocks remain flat.

  1. Samurai Market

This is the market jargon for Japan Stock Market. It was derived from an iconic Japanese warrior known as the samurai.

  1. Yankee Market

This is the market jargon for the United States Stock Market. Americans are referred to as Yankees in a slang speech.

 

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