What is blue chip stock?

 Origin

The term "blue chip" derives from poker. The simplest sets of poker chips include white, red, and blue chips, with tradition dictating that the blues are highest in value. If a white chip is worth $1, a red is usually worth $5, and a blue $25.

Oliver Gingold- who worked at Dow Jones, is credited to name the phrase 'Blue Chip' in 1923. The term 'blue chips' became popular after he wrote an article where he used 'Blue chips' to refer the stocks trading at a price of $200 or more.

What is blue chip stocks? 

A blue chip stock is a huge company with an excellent reputation and has a market capitalization in the billions, is generally the market leader or among the top three companies in its sector.

Investors turn to blue-chip stocks because they have dependable financials and often pay dividends. But the bankruptcies of General Motors and Lehman Brothers, as well as a number of leading European banks during the global recession of 2008, is proof that even the best companies may struggle during periods of extreme stress.

Individuals can invest in Blue-chip stocks in India either directly or through Mutual Funds.

Top blue chip stocks :

1. Reliance Industries Limited 

2. Tata Consultancy Services 

3. Indian Tobacco Company 

4. Hindustan Unilever Limited

5. Infosys