[TheNegotiator]

I'd like to see what others think about the phrase which has been used more and more recently. Anyone with even a slight interest in the markets has probably heard this phrase. "Today is risk on as stocks soar" or "We're very clearly risk off as flight to quality continues". What the hell does it really mean though? Right now markets right now are highly sensitized to risk due to ongoing systematic problems throughout the world. Some specific stocks and assets are seen as more defensive than others and so when risk is off, these stocks should relatively speaking outperform more speculative investments.

So what is annoying me more than anything is that some guys have started using it as a replacement phrase for "stocks are up" or "stocks are down". For example, the stock indices may have moved higher yet overall it's not based on riskier stocks, yet someone might say "it's risk on today". Well that's pretty misleading imo. Anyway, does anyone else have any thoughts on that or any other phrases they'd like to complain about??

[zdo]

What the hell does it really mean though?

Excellent question!
Didn’t it used to be almost a purely foreign exchange concept? Generally Risk on = higher yield currencies. Risk off = lower yield currencies. Hopefully someone has a better explanation than that. Most forum talk will not get specific at all.

Seems to me, it’s assimilation into routine ‘wall street’ lexicon is only a recent happening. … months old? “Switching”, into more or less “beta” ,etc were the stock trading world’s words for it. But I may be wrong… the only time I see CNBC is inside the bank when doing a bankwire or something and I read no WSJ, etc. The sources that pre-inform that they are going ‘risk on’ or ‘risk off’ continue to have some value. The sources reporting post flow that today is ‘risk on’ or ‘risk off’ are useless.

Maybe the uptick in the whole planetary financial system’s going singular / correlated has something to do with the phrase catching on?

Will have to figure out how to anwer your poll. I don't really care and sometimes (like if I'm exposed to it more than about 5 minutes) the 'phrasing' of bs does annoy the heck out of me.

[TheNegotiator]

Originally Posted by zdo »

Maybe the uptick in the whole planetary financial system’s going singular / correlated has something to do with the phrase catching on?
.

Could be. But also I find that due to the vastness and non-regulated nature of the internet as a news/idea delivery method, you have to take into account the 'Chinese whisper' effect.

[SIUYA]

they annoy the heck out of me....but ultimately like Zdo...i dont care.
You have to remember that most of this is perpetuated by news people who are just parroting the brokers, who have nothing better to do.
Remember what a risk free asset was - it was a government backed security.....now these are riskier than corporate bonds!!

Other jargon that drives me nuts as its miss/over used....
"bargain hunters",
when a market pulls back --"profit taking in the market today"
and the continual - this is the biggest up day in X weeks, X days, whatever.....usually nothing significant.
and the best is....
"long term"

[zdo]

way back when - before the talking heads co-opted it and it became Bull -
what did it really mean in the banks when the desks got the edict
risk on
or
risk off
???

[WeToddDid]

I think that those terms are complete bullshit.

The way the talking heads use the term "risk on" is when stocks are going up therefore meaning traders are buying the market. This infers that going long the market is risky and going short the market (i.e., risk off) is getting out to risk assets. I think if the talking heads thought about the message that they are conveying for just a second they would stop using the term because it seems as though that is the exact opposite message that they want to convey.

[WeToddDid]

Just to clarify. I am not inferring that there is no risk in going long or short. There is certainly risk in going long or short. I am simply making the observation that the talking heads tend to be cheerleaders for the market and using the term "risk on" and "risk off" seems to be at odds with the cheerleading.

[SIUYA]

I worked at a broker many years ago....on a floor with many other people from various brokers and banks.....I had never heard of the expression before the recent few years.
It also appears more along the lines of " high correlation is on/of"

I did find this....

http://www.research.hsbc.com/midas/R...F&n=282506.PDF