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Trading Slang

Written By

James Barra

Written By

James Barra

James is an investment writer with a background in financial services. As a former management consultant, he has worked on major operational transformation programmes at prominent European banks. James authors, edits and fact-checks content for a series of investing websites.

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Edited By

Jemma Grist

Edited By

Jemma Grist

Jemma is a writer, editor and fact-checker focused on retail trading and investing. Jemma brings a unique perspective to the forex, stock, and cryptocurrency markets and works across several investment websites as a researcher and broker analyst.

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Fact Checked By

William Berg

Fact Checked By

William Berg

William contributes to several investment websites, leveraging his experience as a consultant for IPOs in the Nordic market and background providing localization for forex trading software. William has worked as a writer and fact-checker for a long row of financial publications.

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Updated

Jul 10, 2024

Internet trading slang is forever evolving so don’t get caught out not understanding the latest lingo. This jargon buster unpacks key trading terms with definitions and examples.

Use our cheat sheet to stay up to date with new terminology on trading forums, from crypto slang to common stock and currency expressions.

Market Movement

Trading slang is often used to describe notable price movements.

Key trading terms include:

• To The Moon – This means the price of an asset is rising dramatically. It is often used to describe cryptos that keep going up and up.
• Tanking – This refers to the price of an asset falling dramatically. It is commonly used to describe stocks that have had disappointing financial performance.
• Short Squeeze – This is when traders bet that the price of an asset will decrease but it actually sharply increases, which can lead to large losses for short sellers. A good example and definition of this was Gamestop mania.
• Long Squeeze – This is when traders bet that the price of an asset will increase but it actually sharply decreases, putting pressure on investors with long positions.
• HODL – Also known as ‘hold on for dear life’, it was born out of the misspelling of ‘hold’, and means investors intend to hold on to a position regardless of market activity. It is primarily used in the crypto space and refers to traders that refuse to sell their tokens despite the price falling, for example.
• Backwardation – This happens when the current/spot price of a security is above the price in the futures market. This typically happens in commodity markets, such as oil.

Memes

Trading slang is increasingly prevalent on social media channels and investing forums. The WallStreetBets community on Reddit, for example, has over 12 million members. Retail trading is essentially clashing with internet humour and the result is a long list of new lingo.

Key trading slang includes:

• Diamond Hands – Community members use this phrase to show they plan to hold onto an asset. These traders often have a high risk tolerance in the face of significant market volatility.
• Paper Hands – This is used to describe traders who close a position or sell an asset as soon as trouble kicks in. These traders are usually risk averse and aren’t willing to hold out for potential rewards.
• Stonks – An intentional misspelling of the word ‘stocks’. This is one of several terms used to describe extraordinary and unusual trading performance. It did the rounds on Twitter, Reddit and Instagram during the GameStop saga.
• Bagholder – This lingo refers to an investor who holds onto a position even when the value of the asset has fallen significantly, or even worse, becomes worthless. A ‘bagholder’ is essentially a trader who held a stock for longer than they should have done.
• GUH – Trading slang used by traders when they are annoyed or upset, usually because they have lost a lot of cash on a trade. It can also be used to describe a current trade that is struggling and where making a profit is looking unlikely.
• Hold The Line – This term is used by traders who are holding onto a position and are urging other investors to do the same.
• YOLO – Also known as ‘you only live once’, this trading slang is used when an individual has invested a substantial amount of capital into a risky trade. Some say a ‘YOLO’ trade should be at least four digits and represent over 95% of an account’s value.

Valuation

Trading lingo is often used to describe the value of assets or the process of assigning value to stocks, forex, commodities, cryptos, bonds or options.

Key trading slang includes:

• Deep Fucking Value – Coined by GameStop enthusiast and early investor Keith Gill, aka Roaring Kitty. A good definition of ‘Deep Fucking Value’ is finding value in an otherwise worthless stock using quantitative analysis.
• DD – Although not trading floor slang, this abbreviation for ‘due diligence’ means an individual has done sufficient research into an asset before putting their capital on the line. The term may also be used by experts sharing market insights or investment recommendations.
• Blind Spots – The definition of a trading blind spot is information that might have been missed but which could materially impact market sentiment. Traders may have compiled data to inform a move but have missed key angles or risk considerations.
• Finfluencer – These are finance-focused influencers sharing trading ideas, setups, terms and investing tips. They can be found on Reddit, Instagram, Twitter, Facebook, and TikTok. They can also be found in English, Spanish, Chinese and Arabic languages.

Animals

Trading lingo found online often uses animals to describe market participants and trading activity.

Key trading slang includes:

• Cockroach Theory – This is the idea that negative industry news will lead to more bad press. For example, one business going into liquidation may lead to similar organizations in the same sector following suit.
• Dead Cat Bounce – An insignificant, brief rise in the price of a falling security or asset. Essentially the meaning of the term is that even a falling dead cat will bounce when it hits the ground.
• Shark Watcher – This term is used to describe a person or firm looking for early signs of a takeover. They will usually do this by observing trading patterns, the accumulation of shares or other notable market activity.
• Black Swan – This trading lingo refers to events that are unexpected and have a seismic impact on multiple, global markets. A good example of this would be the dot com bubble bursting or when Britain voted to leave the EU.
• Whales – This relates to large financial enterprises, such as hedge funds or banks, that have significant cash reserves to enter markets and impact the price of assets. This trading lingo originates from the use of ‘whales’ in the casino industry.
• Bulls and Bears – These terms refer to the position a trader takes. A bull market is when investors are buying assets and going long – these traders are known as bulls. A bear market is the opposite where traders are selling assets and going short – these traders are known as bears.

 Final Word On Trading Slang

Trading slang is a form of language comprising informal words or expressions. And with retail investing growing in popularity alongside the evolution of the internet and social media, new trading lingo is appearing all the time.

Getting your head around key trading terms is a good idea for beginners, so use our dictionary to stay on top of the latest slang. Our cheat sheet is updated with the latest terminology and definitions.

FAQs

What Is Trading Slang?

Trading slang is words, abbreviations, acronyms or terms which describe trading activity. Lingo can be used to describe market movements, positions to take or not take, plus strategies for investing in emerging cryptos, for example.

Is Stock Trading Slang Common?

Stock investing is popular with retail traders so there is a long list of key lingo that has evolved from social media and discussion forums. Some of the most common slang words are ‘Stonk’, ‘Deep Fucking Value’ and ‘Bagholder’, many of which were born out of Reddit forums.

Where Can I Find Definitions For Trading Slang?

Our jargon buster explains the meaning of key lingo in the online trading and investing space. We unpack the latest memes and trading slang.