This term basically means that a stock trader is using a trading strategy that benefits from some pretty intricate movements in a stock price. The idea is that they cover their short on a stock by closing the position after the stock has dropped, bounced back, and dropped again. They do this because they think the stock will go even lower to make up for the bounce back.
We don't recommend you try this at home, but good for the Wall Street dudes who can pull it off.
Related or Semi-related Video
Finance: What is Dead Cat Bounce?13 Views
Finance allah shmoop What is a dead cat bounce It
sounds like a dance move from the old west right
but it actually refers to a terrible situation when the
market plummets rebounds very slightly and then plummets again The
idea comes from the notion of dropping a cat off
of a high building It hits the cement dead bounces
a bit before then is a big wet thud Yeah
peeta no cats were harmed in the production of this
definition Thie market has fallen from five thousand twelve hundred
now it's at fourteen hundred and now it's back to
twelve hundred Yeah that uplift of two hundred points there
from twelve hundred fourteen hundred before it went back twelve
hundred which is the concrete that's the dead cat bounce
I'm not totally sure who came up with this term 00:00:50.247 --> [endTime] but wei have a pretty good idea
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