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:
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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.
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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.
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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.
Talk it out: Have you come across any Wall Street words you find confusing?
photo source: FOXBusiness.com
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