What terrifies you about investing? We clarify some chilling investing terms.
This Halloween, gather ‘round for a spine-chilling look at investing phrases to be wary of:
Zombie Stocks
These stocks represent companies that can be deemed "walking dead." They often refer to shares from firms that are close to insolvency or in bankruptcy, unable to cover interest payments due to ongoing financial struggles.
What’s a penny stock? It’s a low-priced stock usually not listed on major exchanges like NASDAQ. Generally, these stocks carry high risks due to their illiquidity, unpredictable pricing, small size, brief history, and limited information. They often trade through the OTCBB and pink sheets.
Take Blockbuster, a former penny stock that traded at around two cents per share. These withered shares lingered in investment portfolios long after they should have been forgotten.
Quadruple Witching
Beware the third Friday of March, June, September, and December. On these days, four kinds of tricky investments (stock options, stock index options, single stock futures, and stock index futures) expire—a phenomenon known as “Quadruple Witching.”
This term takes inspiration from the three witches in Shakespeare’s “Macbeth.” Before 2002, only three types of investments were expiring, hence the old term “Triple Witching.”
These witches are dreaded for the heightened volatility they bring. That’s why these days are also called Freaky Fridays.
The Misery Index
The Misery Index is calculated by adding the unemployment rate to the inflation rate, giving insight into the economic well-being of the average citizen. It reached a 28-year peak about a decade ago, but recently, it's hit an all-time low.
MORE: Don’t hesitate to dive into discussions. Engage with investments in any setting.
