Tweezer

To understand a tweezer, you need to know what “options trading” is. The TL;DR version of options trading: options are basically insurance you can buy on a security (like stocks). If we use stocks as an example and the stock goes up, that means you’ve lost some money if you paid for an option. But, if the stock goes down, your option you sold acts as insurance, and obligates whoever bought the option to buy your loser-of-a-stock at the previous price. Options trading is like love: it’s a battlefield.

So back to tweezers: tweezers is a pattern that can be identified when analyzing options trading.They’re called tweezers because they look like tweezers with a V-shape either at the top (upside down V) or the bottom (normal V shape). You can see these shapes on what they call “candlestick charts,” which investors use to analyze options trading.

So what do investors use this tweezer-voodoo-magic for? They can identify tweezers (easier said than done) to see bullish or bearish market trends, which can help inform their investing decisions.

If you’re not a trend investor and stick to the long-term game like Buffet recommends, then tweezers aren’t something you’ll be much concerned with. But at least now you won’t hear “tweezers” in a conversation of finance-peeps and start talking about how you couldn’t find yours last time you had a splinter.