Posted in Finance, Accounting and Economics Terms, Total Reads: 254
Definition: Tip From a Dip
Tip from a dip means taking advice from a person who claims to have some insider information about a company or any other particular security that the general public does not know at all, but such information does not turn out to be fruitful and the value of the stock does not increase. However, these people claim that once this position is out in the open market, the market price of that particular stock will be affected hugely and hence, according to this information the traders should take their buy or sell positions.
Although, if the information proves to be correct then definitely there are chances of huge profit booking by the ones who gets access to these kind of information before the market but at the same time if it happens to be a tip from a dip then there may be chances of loss as well. These people who claim to have such kind of information are also referred to as tippers or tipsters.
According to Government regulations, taking advice from such people is prohibited and it is considered to be unethical. Government has introduced various norms and also there are various rules and regulations imposed by market regulator Securities and Exchange Board of India (SEBI) to prevent directors or CEO’s or other people who are at such powerful positions to refrain from disclosing any information that may affect the stock of the company in the near future before the formal announcement by the company in the open market.