Crazy Metaphors in the Finance Industry
Tags : ,  ,  

Bagel Land
No, it’s not an island brimming with all the most wonderful bagels in all of their delicious glory, although we sure wish it was. This imaginary land of bread roll goodness is nothing but a reference to its shape.

Contrary to popular belief, the financial industry does have a sense of humor. Bagel land simply means a stock or security that is moving closer and closer to a price that is bagel in shape: $0. So, in short, when you are in bagel land, you are not, in fact, in paradise. It just means you’re nearing worthlessness. A stock that has arrived at bagel land has either experienced problems in running their company or has had poor profit or is simply performing very poorly to the point of bankruptcy. If a stock is in bagel land, as an investor, you better get out of there soon before you lose more than you can handle.

Barefoot Pilgrim
A barefoot pilgrim in its natural sense is a person who is wandering, without shoes and other worldly possessions except for the clothes on his back, with the goal of arriving in a sacred place due to their devotion. Although this phrase is usually associated with sanctity and enlightenment, in the financial industry it is a heavy with negativity.

A barefoot pilgrim when used in financial terms is a slang for a naive investor who has lost all of his assets because of stock market trading. The loss can be attributed to his naivete, takings risks that are much more than he can handle and not conducting enough research before a trading decision. These poor investment choices are the things that will merit you the title of barefoot pilgrim so be careful not to be labeled as one.

Bloodletting
Some of the first things that come to mind when you hear the word bloodletting are charity drives, hospitals, injections, and generally anything related to blood and health care. In the finance industry, however, it means something much more brutal (in terms of financial loss, of course).
Bloodletting means a time period in your trading characterized by constant losses in investment. It is a common occurrence during bear markets.

Dead Cat Bounce
Imagine a dead cat bouncing after falling. We know it’s not a good mental image but it’s a popular phrase in the financial industry that was derived from the saying, “even a dead cat will bounce if it falls from a great height.” Although it is a bit dark in terms of description, it is an aphorism that has been widely used by market participants for its applicability.

A dead cat bounce is the brief recovery from a steep decline before the trend continues its downward journey. A stock in a bear market usually experiences a dead cat bounce after a continuous downward direction and then promptly continuing the decline after the short-lived price hike.

Stuckholder
No, we didn’t misspell that. There really is a term such as stuckholder and a witty it is. As you’ve probably guessed, a stuckholder is indeed a stockholder whose stocks are stuck with him. Confused? Well, let’s clarify. As an investor and trader, when you acquire stocks, you’re automatically called a stockholder. Now, the nature of the business is of course, to buy and sell. Once the stocks are in your possession, your goal now is to sell it for a higher price than you bought in order to generate profit. Now, what if you are unable to sell those stocks? Why, you say? Well there are plenty of reasons. One of them is when the SEC or the Security and Exchange Commission suspends the trading of that particular stock due to reasons such as invalidation of the company that originally owns the stock, etc. Suspension of trading leaves the stuckholder no choice but to remain in their position.

There are more terms that the financial industry has conjured up. In order not to get confused, you might as well learn them so that one day you’ll be able to understand any finance jargons and metaphors thrown at you.

Leave a Reply

Your email address will not be published. Required fields are marked *