Definition of Blue Chip

What does the term "blue chip" mean? What is the definition of the term "blue chip"?

The term "blue chip" is mainly used to describe high-quality companies that trade on the stock market. The term, however, originated in the world of poker.

The King explains the meaning of the term Blue Chip when it comes to poker and also the financial world.Most poker chip sets come with three colors - white, red and blue.

The white chips usually have the lowest value, the red chips have the second highest value and the blue chips have the highest value.

So, a white chip might be worth $1, a red chip might be worth $5 and a blue chip might be worth $10.

So, a "blue chip" would denote the highest value. A "blue chip" stock would be a stock of the highest value - something like Microsoft, McDonald's or Berkshire Hathaway. These would all qualify as "blue chip stocks" due to their high perceived value.

The term extends to other areas as well.

For instance - let's say that there is a high school basketball player who is very highly rated. This basketball player would be said to be a "blue chip" prospect, as he/she would be seen as a prospect of high value that would likely turn out to be a very good college/professional player.


In terms of the stock market, the term "blue chip stock" is said to have been coined by Oliver Gingold, who was an employee at Dow Jones in the 1920s.


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