Also found in: Dictionary, Thesaurus, Idioms, Encyclopedia, Wikipedia.


1. A change in a security's price quickly followed by another change in the opposite direction. For example, a security could rise $1 then quickly lose $2, or it could fall 50 cents then rise 75 cents. Whipsaws are significant risks for day traders and speculators who may lose large amounts of money in short-term trading.

2. To buy securities at a market top or to sell at a market bottom. That is, one whipsaws when one buys or sells securities at exactly the worst possible time. One whipsaws out of fear or out of misreading market signals. To whipsaw is also called to chatter.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


A quick price movement followed by a sharp price change in the opposite direction. An investor expecting a continuation in the direction of a security's price movement is likely to experience whipsaw in a volatile market. This risk is very important to short-term traders but inconsequential to long-term investors.
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.
Mentioned in ?
References in periodicals archive ?
the whipsaw effect varies inversely with the probability that the case
Hence, a taxpayer in this situation faces an interest-rate whipsaw that another taxpayer may avoid.
If the whipsaw is applied against taxpayers, the results will be catastrophic.
A whipsaw case is one in which the IRS is confronted by conflicting claims by different taxpayers, often divorcing spouses, concerning the same transaction.
The IRS appeared to be concerned that by clearly allowing taxpayers to claim capital treatment for termination payments, it was granting them a wide degree of latitude to selectively "whipsaw" the government.
When power prices might whipsaw, derivatives can help.
equities are back under pressure after whipsaw trading overnight following a WSJ report that Apple had cut production targets on certain iPhones, along with antitrust accusations leveled at Micron by Chinese authorities (FT) and a frosty dialogue between U.S.
Independent oil and gas research, Derrick petroleum Service on Thursday said a $20 Billion excess of Oil and Gas assets is currently for sale worldwide due to the whipsaw in oil and gas prices demand in the economic downturn with estimated value of more than $10 million.
Neither form of error should trigger an ordinary gain/capital loss whipsaw against the taxpayer?
According to the Preamble, the IRS chose the "disposition approach" over the "lock-in approach"(9) for a number of reasons including: (1) to eliminate the practical need for costly E&P studies to determine stock basis; (2) to eliminate the need for transitional rules to address whipsaw and planning opportunities arising from duplication or omission of items under duplicate systems; (3) to eliminate the need to maintain both systems for an indefinite time, and thereby avoiding significant compliance and guidance burdens for both the taxpayers and the government; and (4) to give force to section 1503(e)(1)(A), which requires modifications to stock basis-- retroactive to 1972--that are similar to modifications under the proposed rules.