Investor Glossary-whipsawInvestor Glossary-whipsawInvestor Glossary-whipsawInvestor Glossary-whipsawInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Whipsaw

The HTML to link to this page
 

Whipsaw refers to the rapid movement of stock prices, either up or down, in a volatile market. In other words, when a share price moves in one direction but abruptly reverses, it is known as a whipsaw. Some investors jump on the stock before it has reversed and caused the whipsaw. Thus a whipsaw can cause an investor to lose money. The investor loses money from a whipsaw by buying a stock right before the price falls or by selling a stock just before the price rises. Whipsaw is therefore related to "chasing the market," when an investor seems to lag behind the market. A whipsaw is dangerous to traders because it throws up an initially misleading signal to buy or sell. Because of the whipsaw condition, a volatile market can punish active traders.



Rate this whipsaw definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: implied volatility, EBITDA, APR, liquidity ratio, labor relations, VIX, current ratio, 1031 exchange, balance sheet, ex-dividend, FTSE, risk management, Zero Cost Collar, retained earnings, dividends payable, stock market close, phantom income, diluted share, debt service coverage, required rate of return, 1035 exchange, command economy, inflation, 144a, real GDP, annual return, limit order, deferred tax, stock split, 401a, wholly-owned subsidiary, margin rate, class C shares, option premium, in escrow, open position, deferred revenue, Key Rate Duration, minority interest, per diem, ex-dividend date, covered put, reverse mortgage, cancelled check, average price per share, FICO score, quality assurance, LIBOR, irrevocable trust


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2015 Investor Glossary - All rights reserved - Terms of Use