Correction
Also found in: Dictionary, Thesaurus, Medical, Legal, Idioms, Encyclopedia, Wikipedia.
Correction
Reverse movement, usually downward, in the price of an individual stock, bond, commodity, or index. If prices have been rising on the market as a whole, and then fall dramatically, this is known as a correction within an upward trend. Antithesis of a technical rally. See: Dip, break.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Market Correction
A drop in the price of a security when that security has been overbought and therefore overpriced. Market corrections are usually short-term and are necessary for the stability of the security.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
correction
A sharp, relatively short price decline that temporarily interrupts a persistent upward trend in the market or in the price of a stock.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
Correction.
A correction is a drop -- usually a sudden and substantial one of 10% or more -- in the price of an individual stock, bond, commodity, index, or the market as a whole.
Market analysts anticipate market corrections when security prices are high in relation to company earnings and other indicators of economic health.
When a market correction is greater than 10% and the prices do not begin to recover relatively promptly, some analysts point to the correction as the beginning of a bear market.
Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.