On many a morning investors around the world awaken to find the price of stocks they own or of stocks in which they have interest has moved dramatically, up or down.
There always has been an aura of mystery surrounding share market trading as much of what happens seems to defy explanation, something akin to the invisible hand guiding capitalist economic systems. In an attempt to clarify or add some respectability to what many see as nothing more than glorified gambling, some market experts have introduced terms common in the world of physical sciences to stock trading.
From chemistry we have assigned the term “catalyst” to anything that produces a significant reaction in stock price movement. The fit is not perfect, as chemistry defines a catalyst as “a substance that speeds up a chemical reaction but is not consumed by the reaction.” The catalyst is the chemical substance that drives the process of catalysis, speeding up a chemical reaction while not being consumed in the action preserving its ability to continue to act as a catalyst
However, the term has gained acceptance in market parlance, with analysts and experts alike offering advice on potential catalysts for a given stock or sector. The catalyst is “released” or introduced into the market in the form of news.
Stock catalysts can relate to a particular company within a sector; to the sector as a whole; or the economic picture in a given country or the world at large. In world of…