Toppy

AAA

DEFINITION of 'Toppy'

A slang term used when markets are reaching highs that are unstable, and therefore a decline can be expected. In the U.S. the Dow Jones Industrial Average, the Nasdaq and the S&P500 are all used to gauge the overall market. The term "toppy" is used when these indexes are rising, but there is analyst sentiment indicating a potential decline.

INVESTOPEDIA EXPLAINS 'Toppy'

The market moves in cycles along with the economy. The indexes (representing the stock market) will climb to new highs then fall back down. The fall is known as many things such as a pullback, a dip or a retracement. Before this fall, analysts use the term "toppy," meaning that the market is reaching a top and might come back down.

RELATED TERMS
  1. Business Cycle

    The fluctuations in economic activity that an economy experiences ...
  2. Cyclical Risk

    The risk of business cycles or other economic cycles adversely ...
  3. Retracement

    A temporary reversal in the direction of a stock's price that ...
  4. Peak

    The highest point between the end of an economic expansion and ...
  5. Pullback

    A falling back of a price from its peak. This type of price movement ...
  6. Market Sentiment

    The overall attitude of investors toward a particular security ...
RELATED FAQS
  1. What does the underlying of a derivative refer to?

    A derivative security is a financial instrument in which the price of the derivative is dependent on its underlying asset. ... Read Full Answer >>
  2. What does it mean to take delivery of a derivative contract?

    When trading derivative contracts for options, a buyer or holder may have to take delivery of the underlying asset if the ... Read Full Answer >>
  3. What does the notional principal of a derivative contract refer to?

    The notional principal amount of a derivative refers to the nominal, or predetermined, value used to calculate payments made ... Read Full Answer >>
  4. How can derivatives be used for speculation?

    Derivative securities could be bought or sold to speculate on the future price of the underlying assets. Derivative securities' ... Read Full Answer >>
  5. What does it mean when I get a Fed margin call?

    Understanding fed margin calls and how they affect your trading account is part of investing basics. A margin account allows ... Read Full Answer >>
  6. What does it mean to roll a derivative contract?

    A derivative is a financial instrument in which the price of the derivative is dependent on an underlying asset. A derivative ... Read Full Answer >>
Related Articles
  1. Investing

    The Ups And Downs Of Investing In Cyclical Stocks

    This strategy can be profitable but only if you know when to dump these stocks.
  2. Fundamental Analysis

    Where's The Market Headed Now?

    Whether up, down or sideways, learn about some of the factors that drive stock market moves.
  3. Investing Basics

    Investment Strategies For Volatile Markets

    Read on to learn some investment strategies when the volatility is high.
  4. Active Trading

    Catching A Falling Knife: Picking Intraday Turning Points

    Trying to pick the absolute top and bottom points can lead to excessive losses. This strategy allows you to hedge your risk.
  5. Active Trading

    Peak-and-Trough Analysis

    Prices never move in straight lines, so it's time to learn about this powerful trend-following technique.
  6. Active Trading

    Market Cycles: The Key To Maximum Returns

    You need to understand the various phases of the market cycle to avoid bubbles and make the best investments.
  7. Trading Systems & Software

    How To Trade In The Hong Kong Stock Exchange

    The Hong Kong Stock Exchange may soon become the third-largest exchange in the world.
  8. Trading Systems & Software

    Want To Trade Stocks In College? 5 Tips To Start

    Investing while in college can be challenging. Here are 5 tips to help student investors make the most of their college years.
  9. Trading Strategies

    The Pros & Cons Of Being A Trader On The West Coast

    There are certain benefits and drawbacks that go with being a trader on the West Coast of North America.
  10. Active Trading Fundamentals

    The Shiny Object Syndrome that Kills Trader Productivity

    People get distracted and, in their excitement, they end up trying to learn everything rather than focusing on the subject they had originally set out to learn.

You May Also Like

Hot Definitions
  1. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  2. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  3. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  4. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  5. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  6. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
Trading Center