When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into less risky investments. True capitulation involves extremely high volume and sharp declines. It usually is indicated by panic selling.

The term is a derived from a military term which refers to surrender.

After capitulation selling, it is thought that there are great bargains to be had. The belief is that everyone who wants to get out of a stock, for any reason (including forced selling due to margin calls), has sold. The price should then, theoretically, reverse or bounce off the lows. In other words, some investors believe that true capitulation is the sign of a bottom.

Investment dictionary. . 2012.

(by treaty)

Look at other dictionaries:

  • capitulation — [ kapitylasjɔ̃ ] n. f. • fin XVe ; « négociation » 1556; de capituler 1 ♦ Dr. internat. Convention, traité par lesquels une puissance s engage à respecter certains droits et privilèges sur les territoires soumis à sa juridiction. « Il y a une… …   Encyclopédie Universelle

  • capitulation — CAPITULATION. s. f. Composition, le traité qu on fait pour la reddition d une Place. La capitulation d une Ville. Les articles de la capitulation. Ce qui est porté par la capitulation. Une capitulation honorable, avantageuse. Faire sa… …   Dictionnaire de l'Académie Française 1798

  • capitulation — Capitulation. s. f. verbal, Composition, traité de la reddition d une place. La capitulation d une ville. les articles de la capitulation. ce qui est porté par la capitulation. une capitulation honorable, avantageuse. faire sa capitulation. tenir …   Dictionnaire de l'Académie française

  • Capitulation — Ca*pit u*la tion (k[.a]*p[i^]t [ u]*l[=a] sh[u^]n), n. [Cf. F. capitulation, LL. capitulatio.] 1. A reducing to heads or articles; a formal agreement. [1913 Webster] With special capitulation that neither the Scots nor the French shall refortify …   The Collaborative International Dictionary of English

  • Capitulation — or Capitulations may have the following special meanings.*Capitulation (surrender) **Stock market bottom *Capitulation (treaty) **Capitulations of the Ottoman Empire …   Wikipedia

  • capitulation — (n.) 1530s, an agreement, from M.Fr. capitulation, noun of action from capituler agree on specified terms, from M.L. capitulare to draw up in heads or chapters, arrange conditions, from capitulum chapter, in classical L. heading, lit. a little… …   Etymology dictionary

  • Capitulation — (v. lat.), 1) Vertrag od. Bedingungen, welche Unterthanen ihren Regenten vorlegen, daß diese darnach regieren, so die C. der deutschen Kaiser, s. Wahlcapitulation; bes. 2) Vertrag zwischen kriegführenden Corps, wodurch das eine dem andern etwas… …   Pierer's Universal-Lexikon

  • Capitulation — Capitulation, ein Uebereinkommen; in Deutschland zuerst die Verträge der Geistlichen mit der Krone, dann seit dem Falle der Hohenstaufen, und förmlich seit Max I. die Bedingungen, welche die Kurfürsten od. die gesammten Reichsstände dem Kaiser… …   Herders Conversations-Lexikon

  • capitulation — I noun abandonment, acquiescence, assent, compliance, consent, docility, giving way, nonresistance, obedience, passiveness, passivity, recedence, recession, relinquishment, resignation, resignedness, self abnegation, submission, submissiveness,… …   Law dictionary

  • capitulation — *surrender, submission Analogous words: yielding, relenting, succumbing, caving in (see YIELD): *truce, cease fire, armistice, peace …   New Dictionary of Synonyms

  • capitulation — [n] giving in accedence, bowing, buckling, conceding, giving up, knuckling under, relenting, resignation, submission, succumbing, surrender, yielding; concepts 83,410 Ant. defending, fight, fighting …   New thesaurus

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