[kuh-pich-uh-ley-shuh
n] 
| 1. | the act of capitulating. |
| 2. | the document containing the terms of a surrender. |
| 3. | a list of the headings or main divisions of a subject; a summary or enumeration. |
| 4. | Often, capitulations. a treaty or agreement by which subjects of one country residing or traveling in another are extended extraterritorial rights or special privileges, esp. such a treaty between a European country and the former Ottoman rulers of Turkey. |
[kuh-pich-uh-luh-tawr-ee, -tohr-ee] , adjective | ca·pit·u·la·tion (kə-pĭch'ə-lā'shən) n.
|
Capitulation
A military term. Capitulation refers to surrendering or giving up.
In the stock market, capitulation is associated with "giving up" any previous gains in stock price as investors sell equities in an effort to get out of the market and into less risky investments. True capitulation involves extremely high volume and sharp declines. It usually is indicated by panic selling.
Investopedia Commentary
After capitulation selling, it is thought that there are great bargains to be had. The belief is that everyone who wants to get out of a stock, for any reason (including forced selling due to margin calls), has sold. The price should then, theoretically, reverse or bounce off the lows. In other words, some investors believe that true capitulation is the sign of a bottom.
Related Links
Capitulation Defined
War's Influence On Wall Street
See also: Bear Market, Bloodletting, Bottom, Correction, Dead Cat Bounce, Falling Knife, Flight to Quality, Panic Selling, Recession, Torpedo Stock
capitulation
in the history of international law, any treaty whereby one state permitted another to exercise extraterritorial jurisdiction over its own nationals within the former state's boundaries. The term is to be distinguished from the military term "capitulation," an agreement for surrender. There was no element of surrender in the early capitulations made by European rulers with the powerful Turkish sultans who were motivated by a desire to avoid the burden of administering justice to foreign merchants. Later capitulations, which in the case of China and other Asian states resulted from military pressure by European states, came to be regarded as (and, in effect, were) humiliating derogations from the sovereignty and equality of these states.
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