A Lesson in Wall Street Slang
- By DailyWorth Team
- August 29, 2011
Wall Street’s traders are known for their, um, colorful language. Much of it is NSFW (not safe for work), but some of it is quirky and useful to know:
Talk it out: Have you come across any Wall Street words you find confusing?
Catch a Falling Knife: This refers to investors who try to time the bottom of a stock or stock market decline. Buying at a bottom can be a good thing (if you think prices will then go up), but you have to time it right. It’s like catching a falling knife: if you’re lucky, you grab the handle. If not, you’re heading to the ER.
The Trend is Your Friend: This taps into the idea that it's more lucrative to invest with a market trend than against it. So a stock (or stock market) that's heading higher will generally continue to do so in the near future. It’s a popular tenet with so-called “momentum investors” who ride these trends. Just be aware: the trend can turn out to be a very fickle friend.
Dead Cat Bounce: Dark humor alert: this phrase refers to the idea that even a dead cat will bounce if it’s thrown from something high enough. Traders use it when a long-declining stock or stock market suddenly sees a small uptick. The idea is that this uptick is temporary.
photo source: FOXBusiness.com
Brokerage Products: Not FDIC Insured • No Bank Guarantee • May Lose Value
The content in this website with the exception of that provided by Charles Schwab have been provided by third-parties and/or prepared by DailyWorth who is not affiliated with, associated with or endorsed by Charles Schwab & Co., Inc. (“Schwab”). Therefore, the information contained within the content of the website that has not been prepared by Schwab should not be considered as approved, endorsed or recommended by Schwab. Schwab does not guarantee that the Information is accurate, complete or timely, nor does Schwab make any warranties to you regarding any results from using the Information. This also includes any links that DailyWorth provides as a courtesy to users of their website to third-party websites. Third-party websites are owned and operated by independent information providers (“IIPs”).
Interviews with Schwab employees created by DailyWorth are for general informational purposes only and should not be considered an individualized recommendation or investment advice. Investing involves risks, including the potential loss of principal invested. Keep in mind that diversification strategies, do not ensure a profit and do not protect against losses in declining markets and may not be suitable for you.
The content provided by Schwab is for general informational purposes only and is not intended to be a substitute for specific individualized tax, legal or investment planning advice. Where specific advice is necessary or appropriate, Schwab suggests that you seek professional assistance.
Charles Schwab & Co., Inc. (“Schwab”). All rights reserved. Member SIPC. (0413-2767)