Terms, Abbreviations & Definitions
Terms, Abbreviations & Definitions
The following provides a partial glossary for the benefit of the newer UndergroundTrader members; some of these terms evolved in the TradingPit itself, some among Traders in general, some from the days when IRC was a much less-used protocol than it currently is ;)
We hope members find it helpful, and if there are any major ones we've missed, please let us know.
Trading Pit Chat Terms
AX: the market maker that leads price movements of a stock
BAND: A stochastic reading ; values from 0 to 100
BACKFILL: Means to use a retracement to exit out of a position
BLOCK: Block trade
BUYFADE: the noodles move down and stock moves up (see SELLFADE)
CLIPS: the same thing as scalping a stock, that means to get in and get out in a small period of time, ideally to sell positions into buyers and cover from sellers
CHIPPIES: Traders using the ARCHIP system, expecting very small gains (and with a tendency to panic out of a trade with slight changes in trend)
COIL: a V shape reversal bounce which may or may not have followthrough, often referred to the stochastics (ie: MSFT 20 band coil 1 minute
stochastics, means MSFT is taking a V shaped bounce through the 20 band)
COIL SUPPORT: Usually .10 below every .50 increment is coil support and .10 above every .50 increment in a stock is
the coil resistance (ie: MSFT trading at 51 means 50.90 is coil support and 51.10 is coil resistance), stocks tend to overshoot to those levels and spring back up or spring back down
CYBER: CyberTrader, a source of real time stock quotes and Level II market information
DEADZONE: A period in the trading day from 11:00 am to 2:30 PM EST characterized by low volume, momentum and frequent market maker headfakes
DUMPER: A stock that opens significantly lower than its previous day trading range
FIBONACCI NUMBERS: Fibonacci Numbers: A series of numbers where the following number is equal to the sum of the two previous numbers, 1, 2, 3, 5, 8, 13, 21, 34.....
FIB SUPPORT/RESISTANCE: Fibonacci-based support and resistance levels, plot the Fibonacci tool on your platform from the intraday high to lows and then the
.382, .50, .618 levels will be apparent
FLUSH: A climactic panic down to shake out longs, ussually climaxing with a hammer bottom reversal
FOLLOWTHRU: a COIL that keeps rising
GAP AND TRAP: A situation where the price of the stock gaps at the open followed by lower prices thereby trapping buyers that bought the gap.
HEAT: sudden increase of buys in a particular stock
INVERSE PUP: opposite of a PUP, a flatine 5 period and slipping 15 period that breaksdown when the 5 period slips (see PUP)
LEANDOWNS: the opposite of a short squeeze, you get continued selling under the 20 band stochastics climaxing in a panic
MA: moving average
MAKE OR BREAK: A situation where the moving averages chart sets up a potential PUP and the underlying stochastics set up a potential mini
inverse pup, this means one or the other will trigger and get FOLLOWTHROUGH. in make or break situations, its important to take immediate stops if the pattern reversed and even
considering reversing the trade for the followthrough
MBT (aka TNMBT): Manhattan Beach Trading; a source of real time stock quotes and Level II market information
MINI PUP: same as a PUP bu with the stochastics 5 period would be %d and 15 period is % dslow (see PUP)
MSL: Market Structure Low, a 3 candle series with a low, a lower low and a higher low, often signaling early reversals
MSH: Market Structure High, a 3 candle series with a high, a higher high and a lower high, often signalling early reversals
NQ's: NASDAQ 100 Eminis Futures
NADOOS: Nasdaq 100 Futures
NOODLES: Nasdaq 100 Eminis futures contracts
OVERLAPPING SUPPORT RESISTANCE: whenever you have at least 2 supports or resistances at a same level, they are considered
overlapping. The more overlapping you have the stronger that support/resistance is. (ie: MSFT pivot support, 3min200pd moving average support and 8 min 200pd moving average
support at 51.25 means its DAMN STRONG and viable to play bounces off those levels)
OVERSHOOTS: When stocks tick a .50 increment they tend to have slippage above and beneath that level by .10, identical to coil support and
resistance levels. (ie: to clip the overshoots at 51 on MSFT means to sell your longs up to 51.10)
PARE: Means to scale out of a position, eg: if you own 1,000 shares of MSFT, means to sell a partial amount at higher increments like 700 shares
out at 49.70 and 300 shares out at 49.90
PERFECT STORM: A variation of the 3 lane highway but with mini pups or mini inverse pups on each chart
PIVOTS: calculated on yesterdays price range also, see this link for the formula http://www.undergroundtrader.com/pivots
PIVOT POINTS: A point, based on Fibonacci numbers, at which market direction is expected to transition to a different trend.
PUP: PowerUPtik breakout, a flatline 5 period resistance and a rising 15 period support that breaks out when 5 period breaks higher
RANGE TRADE: swinging a stock intraday, looking for a break of the range, utilizing wider stops, a trader will often take smaller shares to adjust to the wiggles
SHORT SQUEEZE: an extended overbought breakout that continues higher and stays above the 80 band stochastics
STICKY 5'S LEVELS: stock prices when they reach increments of 5, subtract .60 and add .60 to the level for the sticky 5's range, eg: 54.40 x 55.60 is the sticky 5's
range, 24.40 x 25.60 is the sticky 5's range, 9.40 x 10.60 is the sticky 5's range) these levels should be considered additional support and resistance levels especially when they test the
first time on wider channel panics
SELLFADE: noodles move UP and stock MOVES DOWN (see BUYFADE)
SLEEPING WITH: holding an open stock position overnight
SPOOS: Slang term for S∓P 500 futures
STICK: $1/share
STONE: $1,000
TAKING IT HOME: holding an open stock position overnight
TIGHT CHANNELS: this refers to the moving averages charts, as the 5 and 15 period simple moving averages indicated the trend channel. rule of thumb, when the space
between the 5/15 period is less than .15 then it is a TIGHT RANGE--- this usually is light volume and should not be overtraded as there are many headfakes and wiggles
THREE LANE HIGHWAY: A setups where the 3/13/60 minute stochastics are moving in the same direction on the noodles and or your stock. 3lane highways are prime setups,
watch the 60 minute, gauge the 13 min and time entry with the 3 minute
TRIN: Trading Index of buying Pressure vs Selling Pressure. [ 1.0 = neutral ] [ under 1.0 = Buying Pressure ] [ over 1.0 = selling pressure ]
TOS: Time and sales; data from Level II source
TURD: Stocks that are trading under $10 a share
250'S: stock prices in increments of 2.5, these levels act as support and resistance 2.40, 2.50 and 2.60 levels (eg: 47.40, 47.50 and 47.60, also 22.40, 22.50 , 22.60)
options are priced in 2.50 increments up to $50 and this acts as a magnet
Common IRC Chat Terms
BRB: be right back
BBIAB: be back in a bit
BBL: be back later
BTW: by the way
FWIW: for what it’s worth
IIRC: if I recall correctly
AFAIK: as far as I know
HTH: hope that helps (alt. Happy to help)
IMO: in my opinion
IMHO: in my humble opinion
LOL: laugh(ing) out loud
ROFL: rolling on the floor laughing
ROFLMAO: rolling on the floor laughing my a$$ off
TIA: thanks in advance
TTFN: ta ta for now
WTG: way to go
TradingPit Trade Abbreviations
3PB: Three Price Break — a Japaneses trading method
BB: Bollinger Bands — a technical indicator
BP: break price — a 3pb term
ECN: Electronic Commerce Network; computerized NASDAQ trading system
EMA: exponential moving average
MACD: Moving Average Convergence Divergence — a technical indicator
MM: Market maker
MO: momentum
MSH: market structure high — a series of three prices consisting of a new high, followed by a higher high, then followed by a lower high
MSL: market structure low — a series of three prices consisting of a new low, followed by a lower low, then followed by a higher low
T1, T2, T3, etc.: Price targets based on Fibonacci number calculations.
MM/ECN Abbreviations
(some of the more significant)
ARCA: Archipelago ECN
BEST: Bear, Stears ∓ Co., Inc.
BTAB: BT Alex Brown Inc.
DLJP: Donaldson, Lufkin ∓ Jenrette Securities
FBCO: Credit Suisse First Boston Corporation
GSCO: Goldman, Sachs ∓ Co.
HMQT: Hambrecht ∓ Quist LLC
HRZG: Herzog, Heine, Geduld, Inc.
INCA: Instinet Corp. (ECN)
ISLD: The Island ECN
MASH: Mayer ∓ Schweitzer, Inc.
MLCO: Merrill Lynch, Pierce, Fenner ∓ Smith Inc.
MSCO: Morgan Stanley ∓ Co., Inc.
NITE: Knight Securities, Inc.
PIPR: US Bancorp Piper Jaffray Inc.
PRUS: Prudential Securities Inc.
RSSF: Bancboston Robertson Stephens Inc.
SBSH: Salomon, Smith Barney Inc.
TNTO: Terra Nova Trading, LLC
TSCO: Troster Singer Corporation
Extracts from Wall Street Journal Interactive Edition Glossary
American depository receipts: Receipts held by an American bank that represent shares in a foreign company. Also called American depository
shares. Abbreviated as ADRs.
American Stock Exchange: Third most active market in the U.S., behind the New York Stock Exchange and the NASDAQ Stock Market. The
exchange was founded in 1842 in New York City. Most stocks traded on it are those of small to mid-sized companies. Also called AMEX, and the curb exchange.
Arbitrage: Technique of buying and selling securities to take advantage of small differences in price.
Asked: Price that someone is willing to accept for a security or an asset. In the stock market, the ask portion of a stock quote is the lowest price anyone is willing to accept
for a security or an asset at that time.
Bear market: When security prices decline 15% or more.
Bid: The price that someone is willing to pay for a security or an asset. In the stock market, the bid portion of a stock quote is the highest price anyone
is willing to pay for a security at that time.
Block trade: Buying or selling 10,000 shares of stock or $200,000 or more worth of bonds.
Book value: The difference between a company's assets and its liabilities, usually expressed in per?share terms.
Bottom fishing: Buying stocks whose prices have bottomed out or fallen to low levels.
Downtick: A sale of a listed security that occurs at a lower price than the previous transaction.
Float: In securities, the number of outstanding shares in a corporation available for trading by the public.
Market capitalization: The total market value of a company or stock. Market capitalization is calculated by multiplying the number of shares by the current market
price of the shares.
Market maker: In a stock market, a trader responsible for maintaining an orderly market in an individual stock by standing ready to buy or sell shares. On a
stock exchange, a market maker is known as a specialist.
NASDAQ: An electronic stock market run by the National Association of Securities Dealers. Brokers get price quotes through a computer
network and trade via telephone or computer network.
Price-to-earnings ratio (P/E): A ratio to evaluate a stock's worth. It is calculated by dividing the stock's price by an earnings?per?share figure. If calculated with the past
year's earnings, it is called the trailing P/E. If calculated with an analyst's forecast for next year's earnings, it is called a forward P/E. Also called the P/E ratio or multiple.
Profit-taking: Selling securities after a recent, often rapid price increase.
Quote: A bid to buy a security or an offer to sell a security in a given market at a given time.
Sell-off: A period of intensified selling in a market that pushes prices sharply lower.
Short covering: Trades that reverse, or close out, short?sale positions. In the stock market, for instance, shares are purchased to replace the shares previously borrowed.
Short interest: Total number of shares of a given stock that have been sold short and not yet repurchased.
Short selling: A trading strategy that anticipates a drop in a share's price. Stock or another financial instrument is borrowed from a broker and then sold, creating a short
position. That position is reversed, or covered, when the stock is repurchased to repay the loan. The short seller profits if he or she is able to repurchase stock at a lower price than he or
she received in creating the short position.
Short squeeze: Occurs when the price of a security rises sharply, causing many short sellers to buy the security to cover their positions and limit losses. That buying leads to
even higher prices, widening the losses and squeezing of short sellers who haven't covered their positions.
Specialist: A stock exchange member who is designated to maintain a fair and orderly market in a specific stock. They are required
to buy and sell for their own account to counteract temporary imbalances in supply and demand.
Spread: In stocks, the difference between the bid and asked prices.
Stop order: An investor's order to a broker to buy or sell a security when its market price reaches a certain level.
Ticks: Upward or downward price movements in a security or index. A downtick is the sale of a security at a price below the preceding deal. An uptick is a sale executed
at a price higher than the preceding sale. For stocks, ticks are in 1/8 increments.
Triple-Witching Hour: Slang for the quarterly expiration of stock?index futures, stock?index options and options on individual stocks. Trading associated with the expirations
inflates stock market volume and can cause volatility in prices. Occurs on the third Friday of March, June, September and December.
Uptick: A sale of a listed security that occurs at a higher price than the previous transaction.
Warrant: A security that allows an investor to purchase an amount of stock at a specified price within a certain time period.