EspressoLogy

As we all know, blue chip stocks are the stocks of well-established, high-quality companies, for which an investor in the market is ready to pay a high value.

So, why “blue” chip and not “red” chip?

It all started in USA with the game of poker (card game). While playing the game, the player used to bet with poker chips including white, red and blue, where blue chips carry more value!

In 1923, for the stock market, the term “blue chip” was coined by Oliver Gingold (an early employee of the company that would become Dow Jones).

When Gingold was standing by the stock ticker (board with moving stock price), noticing several trades at USD 200 or 250 a share or more (high-priced stocks at the time), he started referring to them as blue chip stocks.

By and by, the term became more widely used and it enjoys worldwide usage to this day. Originally, this term was used for high-priced stocks, but nowadays it is used for good-quality stocks that are valued highly.

In India, Nifty 50, Sensex 30 and large cap stocks are known as blue chip stocks.

(Source and credits: Sites for BSE and NSE, Investopedia, Wikipedia, livemint.com and assorted sources.)