Stock Market: Understanding The Jargon

Blue-chip stock

a reference to the blue chips used in the game of poker, such stocks are of established companies which have performed well regularly over a considerable period of time. Stocks of companies like IBM, GE are considered to be blue chip stocks.

Bottom fishing

to fish or buy stocks that have suffered significant decline in their prices or are continuing to do so.

going long

to buy and hold a stock for some length of time.

Going short

To sell stocks short, i.e., to borrow and sell stock which you do not want to own for the moment but intend to do so later on for a comparatively lesser price.

Uptick

Uptick means the next trade is at a price higher than the previous trade. However for certain transactions to be executed you have to do it on an uptick.

Downtick

Downtick means exactly the opposite of an uptick, i.e, the next trade is at a price lower than the previous trade.

Elves index

a much trusted index, Louis Rukeyser makes an index of the opinions on the general stock market for the coming 6 months. He polls 10 respected analysts every week (they are the same ones every week), to know what they assume the general trend will be, either bullish (+1), neutral (0), or bearish (-1). Obviously, the index range is -10 to +10.

Call money rate

Also known as the broker loan rate, this is the interest rate that banks lay on brokers to finance margin loans to investors. The broker in his turn charges the investor the call money rate plus a service charge. Investors who are willing to buy on margin will pay this rate.