Comment on Query of the Day

Shoaib commented on 14 Aug 2013, 12:15 PM

Blue chip stocks are typically stocks like Reliance, Infosys, Microsoft etc, Well established and financially sound companies that have proven track record after operating for many years. In India stocks having market capitalization of over 10,000 crores and being in business for more than 10 years are called blue chip stocks.

The question is why are they called blue chip?

Ans. For all those who don’t play poker, this is how poker chips look like:

The roots of poker go back to over 200 years ago, they say that black chip – the 100 dollar one in the above figure was not there originally and the blue chips were typically the highest value chip in most poker sets. Similar to how in poker people were calling the highest value chips as blue chips, people started calling high value stocks as blue chip stocks.

A new term introduced in the last 10 years is Green chip Stock. This has nothing to do with poker, but stocks along the lines of ” green or earth friendly” industry are called green chips. So for example Suzlon which is into wind energy or tesla which makes electric cars are called as green chip stocks.

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