Spooky Market Halloween Terms

If you think the stock market is scary, check out these spooky trading terms… no need to wait for Halloween!

October is commonly held as the most volatile month of the year, with standard deviation of monthly returns 33% greater than the average for the other 11 months. At DayTradeSPY, we put volatility in our favor and tend to make some serious money in these times! Bear in mind, this is also the start of the Halloween effect, the theory that says returns are higher between Halloween and May. If you are on the sidelines with cash, this may be the best time to get vested.

Winner’s Curse: the concept of overpaying for an auctioned item as a result of having incomplete information, often found in initial public offerings that have no set fair market value.

Dark Pools: private exchanges largely used by institutional investors for trading big blocks of securities without causing major price fluctuations.

Witch Hours: double, triple and quadruple witching occurs whenever groups of financial contracts, typically options and futures, expire at the same time.

Phantom Stock: type of deferred employee compensation plan that allows employees to benefit from a company’s share price appreciation without actually issuing new shares that may dilute share price.

Zombie Stocks: companies that can best be described as “walking dead,” having shares that are insolvent at either near or in bankruptcy.

Misery Index: a BLS indicator that is a compilation of the unemployment and inflation rates used to determine how the average citizen is doing economically. The current rate is 7.216, up slightly from last month.

Graveyard Effect: a bear market where investors cannot sell their holdings without a significant loss and cautious new investors have no desire to enter.

Ghosting: collusion between firms that illegally manipulate a stock’s price.

Ghost Liquidity: a phenomenon in which apparent market liquidity may be systematically overstated.

Cockroach Theory: stipulates that when bad news hits, it’s usually only half the story, with more bad news to come.

Black Swan Events: extremely rare events that happen out of nowhere and cause a monumental mess. They are impossible to predict, yet in hindsight seem all too apparent.

Dead Cat Bounce: a brief retracement of a declining stock only to drop to a support level in preparation for a recovery phase.

Stagflation: the ultimate perfect storm where slow economic growth combines with high unemployment and high inflation.

Piker: a bottom-tier worker who pretends to know everything about Wall Street but really knows nothing.

Jekyll and Hyde: companies, finances and CEOs with a dual personality, characterized by sudden shifts in value as previously concealed information is released.

Voodoo Accounting: when a company uses highly suspicious accounting methods to disguise what is really going on with the business.

Suicide Pill: a defense strategy used by acquisition targets to make themselves less attractive to takeovers, usually hostile ones at that. The target company often takes on huge debt to scare off a suitor.

Tombstones: teaser prospectus for investors providing “bare bones” details about a company it is underwriting.

Graveyard Market: the end of a prolonged bear market when investors have just finished weathering a financial storm.

Zombie Debt: a bad debt so old it is likely forgotten.

Naked Trading: perhaps depending on who is doing the trading, this could be very scary but, in the options world, naked options are created when the options writer or seller does not own any or enough of the underlying security to meet their potential obligations.

I left the scariest of all for last: one that some of you may regret, perhaps for the rest of your mortal lives — the fact that you will miss the occasions to change your course in the market. DayTradeSPY provides day trading opportunities on the SPDR S&P 500 (SPY) using several outstanding programs.

Just getting started? Join our Inner Circle where we provide you with a daily morning market analysis and more.

Conversely, let us do the heavy lifting with two great programs: the DTS Signal and the Pick of the Day; both enjoying amazing success!

The Trading Room, where we bare all, daily 9:20 to 10:30 a.m., ET.

Interested to know more? Check out our Into to Trading/Week in Review, 8 p.m., ET, Sunday. It’s free and sure to be a scream!

Well my dear ghouls, that’s our tour of the trading ghosts and gremlins. When black cats bounce and pumpkins gleam, may luck be yours on Halloween!

Witching you a happy Halloween!

Hugh