Air Pocket Stock

Posted in Finance, Accounting and Economics Terms, Total Reads: 421
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Definition: Air Pocket Stock

Air pocket stock is a term used to define a stock which experiences a drastic & sudden decline in its price, which happens due to calamity or turbulent issue with the company/brand. 


An air pocket is generally temporary and does not indicate a deeper problem. The term is named as air pocket stock because as a plane hits an air pocket, the airplane faces a sudden drop in its’ altitude.


It is instance which happens on a very short-notice. However, in most cases, the prices of the stock gradually increase over a period of time, and reach to point similar to the earlier price.


Example:

If a government introduces a certain restriction on a certain product or service, there is a sudden decline in the stock market price due to this bad news. 


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