Posted in Finance, Accounting and Economics Terms, Total Reads: 385
Definition: Sell Off
Sell off is rapid selling of securities, bonds and commodities due to decrease in their value of security because of increase in supply. Rapid selling of securities lead to decline in their prices and this selling generally happens at lower prices.
When a good number of shareholders sell their specific shares generally at lower prices lead to rapid decrease in that share’s price. Here buyers are few and sellers are large in number. More availability of stocks at sudden and prices of stocks dropped due to decrease in their value of security.
Sell off can occur due to many reasons. For example- if a company offers disappointing earnings report it results in conditions lead to sell off. This can happen due to some external forces too. Like increase in prices of raw material may lead to sell off of food stocks.
Investors should keep track of stocks and should sell stocks at right time before sell off happens and investor keeping the last stocks. At the same time, investors can buy stocks at the time of sell off.