Market Lore

Working on a trading floor can be a lot of fun, not least because traders, marketers, researchers (economists, strategists, whatever) can have, shall we say, somewhat quirky personalities.  Even in today's politically correct HR-monitored environment, there is a constant flow of profanity-laced 'stream of consciousness-type' patter.  Cliches are legion, with many floor denizens relfexively repeating their favorite Simpsons or South Park quotes.  Or Animal House.  Or Risky Business, or Wall Street - I once walked past a filing cabinet on which some of short-term financing guys had placed the remains of a couple of boxes of Italian Pastry.  I said, to nobody in particular, "Leave the gun.  Take the Cannoli."  They laughed way too loudly, and told me I was about the 50th person to say that.  Here, in no particular order, are some of my favorites:



Circle the Wagons - When things are going badly, it's time to go into defensive mode.
Don't be a dick for a tick - You don't want to miss a trade for a tiny price difference.
More buyers than sellers - A popular explanation for why prices are rising, especially when you have no idea what's really causing it.  And when prices go down?  I'l leave that as an exercise for the reader.
I never learned anything when I made money - An early mentor told me this to make me feel better about making a stupid mistake that cost the firm a bunch of dough.
The job of the market is to:
 a) find a clearing price
 b) destroy information
 c) cause the most pain to the most people.  Especially you. - I love this one.  I always told trainees about this, especially ones that came in fresh from b-school.  You can pretty much say anything you want after 'The job of the market is to...'
The path of most pain - the pain trade - A corrollary to the previous one.  It's easy to guess that whatever the market is about to do, it's going to go where it can cause the most pain.  Think of the market as a giant, evil, slavering beast.  It knows you're there, it's aware of you.  It's coming to get you.  It also happens to crap out gold bars, and if you're nimble, you might be able to pick one up before it catches you.
get your rally cap on!
Blood in the streets! - Typical meaningless phrases that substitute for actual intelligence.  there are dozens of these.
Bulls make money, bears make money, pigs get slaughtered - A great one.  You can take a view on the market and make money, but if you get greedy...
Where are the customers' yachts? - This is actually the title of a book from 1940 written by Fred Schwed, but it comes from an old Wall Street joke.  Y'see, a naive young graduate is being given a tour of Wall Street by an old pro, and they end up down at the marina near Battery park.  The old pro points out the traders' yachts, the salesmen's yachts, the brokers' yachts... and the naive fool asks "But where are the customers' yachts?"
Don't be short a quiet market -Authentic Wall Street gibberish.  It reflects the idea that quiet markets can move suddenly, and that somehow it hurts more to be 'short' than 'long.' 
Talking your book - When you have a trading position, you want it to work sooooo much... you tend to see the world through the lens of your portfolio, and of course you try to convince others.
Buy low, sell high, keep your costs down - Pure wisdom.  Most people forget about the third part.
make me a market on... - Making a two-way price, indicating where you would buy OR sell is called 'making a market.'  You can tell Wall Street guys, because they quickly start talking this way about everything (this includes the next 5 entries as well).  'George, make me a market on how long it takes for my dog to realize that the cat is eating his food.'
bid/offer - bid for / offer at - A bid is the price you're willing to pay for something, an offer is where you'll sell.
bid out/no bid/offer out/no offer - 'Bid out' means you don't want to buy.  'Lindsay Lohan?  What a skank!  Bid out!'
locked market - When a trader makes a locked market, it means he's indifferent between buying or selling.  He'll do both at the same price.
He sees it locked better away - When a trader makes a locked market, tradition is that the customer HAS to trade.  One time, a customer passed on a locked market, saying 'It's locked better away,' meaning that one of our competitors was giving the customer a better locked market.  It took about 20 minutes for the uproar to die down, and I don't think we ever traded with that customer again.
what's your size? - How much of that trade will you do?  You want to bet on the Knicks against the Celtics?  What's your size?
churn 'em and burn 'em - What stockbrokers do when the commissions are coming in low this month and their kids are going to ivy league schools.
Broker enrichment trade - A trade that is so complicated and involves buying and selling so many securities that nobody but the broker - who gets commissions based on the size of trades - can possibly make any money out of it.
overbought/oversold - Another great excuse for why the market is doing what it's doing.  An 'overbought' market is supposed to be too expensive, and will soon fall.  Uh huh.
consolidating - If the market is just sitting there, maybe it's in a consolidation phase.  And so is my waistline.
due for a correction - When the market has been moving in the same direction for a while, especially when you've been getting it consistently wrong, you might say that it's 'due for a correction.'  You hope.
support and resistance - Support is a level that the market is supposed to have a hard time falling below, while resistance is a level that stops the market from rising.  These levels are determined by technical analysis, which I hereby officially dub this blogs can of worms.  One day, when I get enough strength, I'll open that can.  But not today.
a crowded trade - When everybody wants to do the same trade, it's called 'crowded,' and it's supposed to be harder to make money on it.  But 've seen plenty of crowded trades make plenty of money.
greenspan/bernanke/Paulson/anybody on the tape - Hey! Somebody's on TV!  What did he say?  WHAT DID HE SAY?
leave the gun.  Take the cannoli. - You can't go wrong with a quote from the Godfather.  Not entirely sure what that says about us.