Definition of Capitulation:
Capitulation is when investors give up any previous gains in any security or market by selling their positions during periods of declines. Capitulation can happen at any time, but typically happens during high volume trading and extended declines for securities. A market correction or bear market often leads investors to capitulate or panic sell. The term is a derived from a military term which refers to surrender.
After capitulation selling, many traders think there are bargain buying opportunities. The belief is that everyone who wants to sell a stock for any reason, including forced selling due to margin calls, has already sold. The price should then, theoretically, reverse or bounce off the lows. In other words, some investors believe that capitulation is the sign of a bottom.
A bottoming out of the market created when a period of declining prices drops suddenly accompanied by high volume, followed by an equally rapid reversal. Compare to Blowoff Top; See Bull Squeeze.
The action of surrendering or ceasing to resist an opponent or demand.
Synonyms of Capitulation
Surrender, Submission, Yielding, Giving in, Succumbing, Acquiescence, Laying down of arms, NATO, SEATO, Abandonment, Account, Accounts, Alliance, Body count, Cartel, Census, Cession, Concord, Concordat, Convention, Count, Entente, Entente cordiale, Giving in, Giving over, Giving up, Head count, International agreement, Inventory, League, Mutual-defense treaty, Nonaggression pact, Nose count, Paction, Recapitulation, Recedence, Recession, Reckoning, Recount, Recounting, Rehearsal, Relinquishment, Renunciation, Repertory, Retreat, Statement, Submission, Summary, Summation, Summing, Summing up, Surrender, Treaty
How to use Capitulation in a sentence?
- Many market professionals consider it to be a sign of a bottom in prices and consequently a good time to buy stocks. .
- However, the extent of a capitulation can only be understood after the fact.
- A capitulation to wage demands.
- Capitulation is when investors give up any previous gains in any security or market by selling their positions during periods of declines.
Meaning of Capitulation & Capitulation Definition