Momo Play

When we see the word “momo,” maybe we picture that creepy YouTube/Whatsapp urban legend bird-legged woman sculpture thing. Or maybe we think of South Asian steamed dumplings and start to get kind of hungry.

But in the trading world, “momo” has nothing to do with spooky sculptures or steamed dumplings. It’s short for “momentum,” and a “momo play” is basically a trade—or play—executed to capitalize on momentum (momo).

Momo play fans really aren’t looking at anything other than momentum. The thinking is this: if a stock is shooting up very quickly, it’s probably going to continue to go up, at least in the short-term. And if it’s dropping, it’s probably going to continue to go down, at least for a little while. We don’t need to know anything else about the stock or the company to execute a momo play; all we’re concerned about is the direction and momentum of the stock.

If this is making a few people out there a little nervous, we can see why. It’s not exactly the most well-thought-out buying and selling strategy. But if we’re looking for a short-term gain, a momo play might be just the thing. For example, if a tech company announces some huge smartphone breakthrough, and their stock starts climbing like crazy as a result, we might feel pretty confident buying or short-selling some shares, knowing there’s a really good chance we’ll make some coin in the process. We’re not in it for the long haul, and we really don’t have any personal investment in the company or the smartphone breakthrough, whatever it is. All we’re here to do is use its momentum to our financial advantage.