Unusual terms you may (or may not) come across while trading.
We all know that the terms bull and bear refer respectively to a rise or fall in the market. Similarly, you might also be aware of the terms hawk and dove, which refer to central bank decisions regarding the interest rate, hawkish being a more aggressive stance aimed at raising interest rates in order to curb inflation, while “dovish” referring to the considerably more soft approach, of keeping interest rates lower.
But have you ever heard, for example, of the term to the moon?
To the Moon is perhaps the one market movement expression investors want to hear over anything else; it describes an often sudden, quick and considerable rise of a stock or asset. As the name suggests, it is reserved only for extremely skyrocketing (pun intended) appreciations.
The opposite of to the moon, would be the term, tanking. Tanking refers to a rapid and significant depreciation of a stock or asset.
Now, I would like you to say the next one with me. Ready? Garbatrage!
Apart from being fun to pronounce, Garbatrage refers to trading activity that is based on rumor or “herd psychology” (a term that means following the general consensus, in our case, following the general investor sentiment). For example, a usual occurrence of Garbatrage occurs when two major companies in the same sector, are involved in a takeover.
A similar term, albeit with darker undertones, is pump and dump, a technique employed only by the lowest morally-inclined market manipulators. It describes a move to capitalize on a market’s positive movement by unethical means, such as fake news, recommendations or untrue reviews on a stock planted or fabricated by themselves. It would be worth noting that this is a crime punishable by law and should not be even considered by individuals who value ethical trading or general freedom.
Another fun, albeit disgusting term referring to market news, is cockroach theory, a term that describes the notion that once bad news is released relating to the market, more unfortunate news are lurking in the shadows. This goes back to an old saying that goes: “For every cockroach you see, there’s a 100 more you dont.”
When to terms related most commonly to the stock markets, the lingo again, is rather imaginative and fails to disappoint. Terms like catching a falling knife, which refers to the situation where a trader buys a depreciating stock, in hopes of a price rebound, which unfortunately does not come, leaving the trader with considerable losses.
And if you thought that was a bit cringy, how about the expression dead cat bounce, which in spite of the imagery of perishing felines it invokes, describes the short-lived rally of an extended downward trend in the markets?
And of course, after cats, we just had to follow up with dogs. Dogs of the Dow to be more specific, a term used to describe companies that are within the 10 highest dividend-yielding stocks from the Dow-Jones Industrial Average.
But since we’ve talked about bulls and bears and dogs and dead cats, I would like to turn your attention to a more pleasant term, and one that is named after my favorite mythological creature: the Unicorn!
In the markets, a Unicorn is a startup that has come to be valued at 1 billion or more. Just like their magnificent legendary counterpart, they are extremely rare, and according to the more cynical amongst us, non-existent.
As an added bonus, here is a list of terms that describe various currencies or currency pairs:
- Aussie: the Australian Dollar (AUD)
- Kiwi: The New Zealand Dollar (NZD)
- The Cable: The most commonly traded currency pair GBPUSD. Named after the cables that were once used for monetary transactions between Britain and America.
- Barney: The USDRUB currency pair. The name derives from the fact that the Russian currency sounds a lot like Ruble, the last name of the famous Flintstones character.
- Betty: You can’t have Barney and not have Betty. This is a nickname for the GBPRUB currency pair, in honor of Barney Ruble’s wife.
- Swissy: A rather unimaginative nickname for the Swiss Franc.
- Loonie: The CADUSD currency pair. Named after the loon, a native Canadian bird that also decorates the 1 CAD coin.
- Ninja: The USDJPY currency pair. This is pretty much self-explanatory, but just in case, it’s because ninjas come from Japan.
Unfortunately, this article is only scratching the surface, when it comes to unusual market terms. I sincerely hope it has at least provided you with some entertainment, if not with some (probably useless) knowledge.