Retreat of prices (plunge)

The quotations – for one security on the stock exchange or – the prices of all securities – suddenly fall back after a period of upward trend; – however, they follow the previous course again after some time. – If such an interruption occurs several times with respect to only one single security – i.e. with otherwise inconspicuous price development overall, measured against the respective index -, then experience shows that investors avoid this security. As a result, its price falls in absolute terms or at least in comparison with other securities. To avoid this, companies often intervene in the market by maintaining the price. – See Algorithm Trading, German Government Securities, Dividend Funds, Price Breakout, Price Fall, Air Hole, Market Maintenance, Yielding, Cyclicality.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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