For a trader, the term Blue Chip stock must befamiliar. So what exactly is Blue Chip stock? What is so special about Blue Chip shares compared to other types of stocks?
Blue Chip Shares are a type of stock that has a large market capitalization.
Please note that the term Blue Chip originally came from the game of poker. In a game of poker, blue chips have the highest value compared to red and white.
The term Blue Chip is used and widely known in the stock world after being introduced by Oliver Gingold. At that time, Gingold saw a trend that stocks worth USD 200-USD 250 attracted investors. Since then, the term Blue Chip has been used for leading stocks in the world of capital markets.
Features of Blue Chip Stocks
The large capitalization of Blue Chip stocks makes these stocks tend to move steadily and not too wildly. You don’t need to be afraid of investing in Blue Chip stocks because usually companies whose shares are classified as Blue Chip are no longer companies that are growing, but are already included in established and strong companies.
This type of stock is perfect for those of you who want to invest in the long term. When market movements are uncertain, Blue Chip stocks usually tend to be stable.
It’s not that Blue Chip stocks won’t decline, but Blue Chip stocks usually recover the fastest compared to small or mid-cap stocks. However, investing in Blue Chip stocks requires higher capital because the price per lot is usually higher than other stocks.
Read now: How to Invest in Blue Chip Stocks?
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