The acronym FAANGs was coined by news anchor Jim Cramer in 2013 and has become the default amongst traders. The acronym refers to American technology companies, some of the most valuable and well-known names in the world. 

 

The FAANGs are very popular with trades, partly because they are so famous, but also because they are so liquid. Read on if you are interested in knowing more about the FAANGs, the new acronym MAMMA, and why you might want to trade the FAANGs or MAMMA.

 

 

 

What Does FAANG Stand For?

The acronym FAANG stands for the companies “Facebook”, “Amazon”, “Apple”, “Netflix” and “Google” respectively. These companies are the biggest and best performing American companies in the technology sector. For this reason, they are the go-to stocks for traders in search of setups.

 

 

 

The New Acronym: MAMMA

This new acronym, also coined by Mr. Jim Cramer in October 2021, is updated for the most significant technological companies after changes to their names. 

 

MAMMA stands for “Meta”, “Apple”, “Microsoft”, “Amazon,” and “Alphabet”. These are the companies that have dominated the technology sector for the past five years and have become world leaders in the tech space.

 

 

 

Why Trade The FAANGs/MAMMA?

For a trader, it is crucial to understand why financial securities of FAANG or MAMMA are considered valuable. The primary reasons to trade financial securities belonging to these companies are:

 

• Well-Known Companies

 

The FAANGs or MAMMA are a group of companies that have established themselves in the market and are leaders in the sector. Most traders even use their products on a daily basis, and thus are aware of the different products or services and can understand the company’s vision. The company’s direction is known to the traders, and these companies are highly reputed across the world, making their stocks so widely watched and traded.

 

• Highly Liquid Stocks

 

The stocks belonging to FAANG/MAMMA are highly liquid, making them highly attractive to traders, both retail and institutional alike.

Since these stocks are so highly liquid, it means they can traded even at the largest volumes for a good price, with little slippage and a tight spread. 

 

• Growth Stocks With Nice Moves

 

The reason these companies are the market leaders is not just that they are good at what they do but also that they proven that they have the mindset to grow beyond what was previously thought of as limits. 

Due to their expansive growth and innovate products, the stock prices of these companies tend to both have large, trending moves, but also with a lot of volatility. This is the perfect environment for traders to find and extract alpha.

 

 

 

Wrapping Up

FAANG/MAMMA represent the most reputed, successful, and valuable companies in the technological world. These companies have provided thousands of consumers with their products and services worldwide. When it comes to financial securities, these companies can provide highhgrowth, trending prices, and many a profit opportunity for savvy traders.

 

It is crucial to understand these companies, since they are the  current market leaders. Some day another company may take the lead in the future, but for now these companies have proven their worth over the years and are most likely to continue doing so in the near future.

 

To inside the liquidity of these shares, click here.