The rapid selling of a security by a large number of investors. This increases the supply of the security available for sale while leaving constant or decreasing the demand to buy; this drives down the price. Selling panics occur for a number of reasons. For example, a stock may drop suddenly in price if its company issues an unexpectedly negative earnings report. The panic comes from investors' desire to sell the stock immediately before the price falls even more. See also: Buying panic, Sell-off.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
A flurry of selling in a particular security or in securities as a whole. Panic selling is accompanied by particularly heavy volume and sharp price declines as owners scramble to sell before prices drop even more. Panic selling is generally set off by an unexpected event viewed by traders as particularly negative. For example, uncertainty surrounding the outbreak of serious hostilities and a cutoff of oil supplies in the Middle East might be sufficient to cause panic selling.
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.