Blue Chip


DEFINITION of 'Blue Chip'

A nationally recognized, well-established and financially sound company. Blue chips generally sell high-quality, widely accepted products and services. Blue chip companies are known to weather downturns and operate profitably in the face of adverse economic conditions, which helps to contribute to their long record of stable and reliable growth.


Loading the player...


The name "blue chip" came about because in the game of poker the blue chips have the highest value.

Blue chip stocks are seen as a less volatile investment than owning shares in companies without blue chip status because blue chips have an institutional status in the economy. Investors may buy blue chip companies to provide steady growth in their portfolios. The stock price of a blue chip usually closely follows the S&P 500.

  1. Blue-Chip Index

    A stock index that tracks the shares of the top-performing publicly ...
  2. Fortune 100

    An annual list of the 100 largest public and privately-held companies ...
  3. Large Cap - Big Cap

    A term used by the investment community to refer to companies ...
  4. New York Stock Exchange - NYSE

    A stock exchange based in New York City, which is considered ...
  5. Mega Cap

    The biggest companies in the investment universe, as measured ...
  6. Blue-Chip Stock

    A blue-chip stock is the stock of a large, well-established and ...
Related Articles
  1. Options & Futures

    Cyclical Versus Non-Cyclical Stocks

    Investing during an economic downturn simply means changing your focus. Discover the benefits of defensive stocks.
  2. Mutual Funds & ETFs

    How to Find Mutual Funds With High Dividends

    Learn about the important factors to consider when looking for mutual funds that pay high dividends, including how they may impact your taxes.
  3. Stock Analysis

    These Are the Benefits of Investing in Wal-Mart

    Understand how Wal-Mart operates and what makes it a good company despite current stock performance. Learn the top four benefits of investing in Wal-Mart.
  4. Investing

    What does "Blue Chip" Mean?

    Describing a business as “blue chip” comes from the game of poker, where blue chips are the most valuable.
  5. Personal Finance

    Finding Spin In The Financial Services Industry

    The financial services industry may stop short of lying outright, but that doesn't mean that everything they say about their products is the truth.
  6. Savings

    5 Ways To Stunt A Child's Financial Growth

    Personal finance is not covered in schools, so it's up to parents to teach kids how to manage money.
  7. Investing Basics

    The Alphabet Soup Of Stocks

    Are the countless stock categories leaving you puzzled? Here we help you sort through the confusion.
  8. Options & Futures

    Finding Undiscovered Stocks

    Wall Street tends to focus on large cap stocks, leaving other stocks under-followed and undervalued.
  9. Investing Basics

    5 Ways To Double Your Investment

    From risky manoeuvres to slow-and-steady strategies, we look at five methods to double your money.
  10. Mutual Funds & ETFs

    Major Blunders In Portfolio Construction

    Do you have the best mix of investments? Find out how to make sure.
  1. What economic factors influence corporate bond yields?

    The most telling signs that a tech stock is about to burst are no different from the signs of impending collapse of stocks ... Read Full Answer >>
  2. Can an investor in the drugs sector buy companies that produce medicinal marijuana?

    Investors may purchase stock in companies producing medical marijuana products, or they may invest in the newly available ... Read Full Answer >>
  3. What qualifies a company as blue chip?

    The term "blue chip" in poker signifies the chip that has the highest value. The term was taken from the poker world and ... Read Full Answer >>
  4. How can I hedge my portfolio to protect from a decline in the Internet sector?

    The best portfolio hedges to protect against declines in the Internet sector are non-cyclical sectors, which tend to remain ... Read Full Answer >>
  5. How do the bull and bear markets affect the value of a spinoff company's stock?

    A spinoff is a type of divestiture in which a company cedes its ownership interest in a business unit by distributing 10 ... Read Full Answer >>
  6. What techniques are most useful for hedging exposure to the financial services sector?

    Investors can hedge exposure to the financial services sector by putting some of their money in utility and blue-chip stocks ... Read Full Answer >>
  7. What does it require for a company to become a blue-chip company?

    Companies known for weathering financial or economic downturns often hold blue-chip status. Blue-chip companies are giant ... Read Full Answer >>
  8. How are blue-chip stocks similar to mutual funds and exchange-traded funds (ETFs)?

    The only real similarity between blue-chip stocks, mutual funds and exchange-traded funds (ETFs) is that they are all potentially ... Read Full Answer >>
  9. What impact does inflation and deflation have on a blue-chip stock value?

    Inflation and deflation, though opposite scenarios, are quite similar with regard to the havoc they can wreak on an investor's ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  2. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  3. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  4. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  5. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  6. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
Trading Center