Rubber Band Effect

Rubber Band Effect

A situation in which a security or market drops precipitously and rises just as much just as fast. On a graph, the rubber band effect looks like a capital "V" because of the price declines and increases. The rubber band effect usually occurs due to the execution of limit orders by computer programs.
References in periodicals archive ?
50 mm) extruder with an AKcess Level II Touchscreen System; inline spiral flow die head; Conair multi-pass vacuum tank with servo driven wheel to minimize the rubber band effect and to minimize tension within the process; servo driven nip roller puller; automatic cut and transfer coiler and a Zumbach ID/OD/Wall tube measurement system with closed-loop control of the OD and wall thickness.
One of the concerns I hear most often is about the rubber band effect.
Over the past year, I have been deeply involved in this question as I focused on mitigating the rubber band effect for clients.