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Lame Duck

Reviewed by Vineeth | Updated on Sep 30, 2020

Catalogue

Introduction

Lame-duck is a term used to point to a trade who has a history of defaulting on his or her debt or has gone bankrupt as they were not able to cope with the losses resulting from trading. The history of this term dates way back to the mid of 18th century when the London Stock Exchange was being developed.

It is not sure as to how the term became popular amongst the traders. The term was first used by traders who were operating out of coffee houses prior to the exchange being founded in an official space. The term is known to be recorded in bank documents and newspapers back in the 1760s.

Understanding Lame Duck

The traders who suffered severe losses in the financial markets stayed away from further activities around the trading world as they thought they had had enough. Also, interestingly, the terms bull and bear as well originated around the same time.

Bull refers to markets shooting up while bear points to markets falling. After having been used popularly in and around the United Kingdom, the term lame duck made its way to the United States of America. In the US, it went onto becoming a description of the business schemes that were not sufficiently financed.

Lame Duck Used in Other Fields

Lame-duck is used in the field of politics as well. The term describes a politician who has not seen any success and was ineffective and has chosen not to contest in another election. Also, it is referred to the politician who is ineligible for another term and is still in the office after losing an election but will eventually be replaced by the person who will be victorious in the election.

However, the term is not in use any more. It was popular in the 18th century, specifically in the mid-1760s in the United Kingdom and a few parts of the United States of America.

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