Blue chip (stock market)
A blue chip is
capital stock of a stock corporation (contrasted with non-stock one) with a national reputation for quality, reliability, and the ability to operate profitably in both good and bad times.[1][2]
Origin
As befits the sometimes high-risk nature of stock picking, the term "blue chip" derives from the
white, red, and blue chips
, with American tradition dictating that the blues are highest in value.
In the United States, blue chips were traditionally used for higher values such that "blue chip" used in noun and adjectival
W.E. Hutton & Co. that he intended to return to the office to "write about these blue-chip stocks". It has been in use ever since, originally in reference to high-priced stocks, more commonly used today to refer to high-quality stocks.[5]
United States
The most popular index that follows United States blue chips is the Dow Jones Industrial Average, a price-weighted average of 30 blue-chip stocks that are generally the leaders in their industry. All companies in the Dow Jones Industrial Average are blue-chips, but the Dow Jones Industrial Average is an index that does not include all companies that are blue chips. Nevertheless, it has been a widely followed indicator of the stock market since October 1, 1928.[6]
See also
References
- ^ "NYSE Group, Inc". Nyse.com. Archived from the original on 2012-10-17. Retrieved 2011-09-19.
- ^ Blue Chip Definition Investopedia
- ^ Merriam-Webster, Merriam-Webster's Unabridged Dictionary, Merriam-Webster, archived from the original on 2020-05-25, retrieved 2016-09-13.
- ^ Merriam-Webster, Merriam-Webster's Collegiate Dictionary, Merriam-Webster, archived from the original on 2020-10-10, retrieved 2016-09-13.
- ^ Prestbo, John (12 March 2008). "Ever Wonder How 'Blue-Chip' Stocks Started?" (PDF). Dow Jones (internal news item). Retrieved 22 June 2018.
- ^ "Dow Jones Industrial Average: Stock Index Summary". Bloomberg. 1928-10-01. Retrieved 2011-09-19.
