The sale of a security at a loss for the specific purpose of moving funds from the sale into a less risky investment. Capitulation refers to investors "giving up" on a particular security. Value investors often review such sales of securities, since the value of the underlying security could be inherently higher than what the share price currently is. Technical traders might view the low price as a potential bottom of a cycle.

Use capitulation in a sentence

We needed to movie it into a less risky investment, so we decided to try capitulation and see if that worked.

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You need to be careful any time you are doing a capitulation that you are not doing anything that the SEC would not approve of.

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My hedge fund manager told me that he had lost so much money on one specific stock that he finally agreed to a capitulation and sold the shares to put the money in safe dividend stocks.

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