Below is a glossary of terms that are used in the online trading industry. Select the first letter of the word you are seeking from the list above to jump to the appropriate section of the glossary.
What are Champagne stocks?
Champagne stocks are stocks whose value have risen very high, very quickly, very often unexpectedly so. Champagne stocks can come from any sector of any industry. A prime recent example would be the stock of American Airlines group, which dramatically increased between September 2013 and the end of 2014 by more than a staggering 233%.
The term “champagne stock” derives from the idea that stockholders are so excited by huge earnings over a short period of time that they will open a bottle of champagne to celebrate. Also, the sudden rise of stock prices brings to mind the image of a champagne cork popping and shooting upwards.
How does one use Champagne stocks?
Champagne stocks can be extremely profitable for traders who get in on them early enough. The danger is that just as the value of a Champagne stock can rise so dramatically, the proverbial bubble could also burst, and the stock could just as quickly depreciate. Knowing exactly the optimal time to buy and to sell requires a keen understanding of market trends as well as excellent fundamental and technical analysis.