Sunday, September 03, 2006


Wall Street is named after a wall that kept farm animals from wandering away from the settlement at the tip of Manhattan. The farming legacy lives on in the language of traders. Four animals are mentioned especially on Wall Street: Bulls and Bears, Hogs and Sheep. Traders says: “ Bull make money, bears make money, but hogs get slaughtered.

A bull fights by striking up with its horns. A bull is a buyer – a person who bets on a rally and profits from a rise in prices. A bear fights by striking down with his paws. A bear is a seller – a person who bets on a decline and profits from a fall in prices.

Hog are greedy. They get slaughtered when they trade to satisfy their greed. Some hogs buy or sell positions that too large for them and get destroyed by a small adverse move. Other hogs overstay their positions – they keep waiting for profits to get bigger even after the trend reverses.

Sheep are passive and fearful follower of trends, tips and gurus. They sometimes put on a bull’s horn or a bearskin and try to swagger. You recognize them by their pitiful bleating when the market become volatile.

When the market is open, bulls are buying, bears are selling, hogs and sheep get trampled underfoot, and the undecided traders wait on the sidelines.

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