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Reaction

Reaction

What is 'Reaction'

A reversal in the movement of a security's price. Reaction is most often associated with a downward movement in the price of a security after a period of upward movement, as investors sell off shares or decrease the volume of buy orders for fear of the security being overvalued. Reactions are likely to be mild and lead to a slight increase or decrease in price, rather than a large change in value. A reaction is similar to a correction but lacks the same intensity.

Explaining 'Reaction'

Reactions are generally considered to be positive for the overall health of the market, since unending price increases can cause inflation or result in an even larger price drop if a company doesn't meet expectations. A reaction is likely to prevent events such as runs or high volume sell offs at later dates.


Further Reading

Economic Consequence of Fraudulent Financial Reporting of China's Listed Companies——Market Reaction on Publicity of Penalty by CSRC and Ministry of Finance …Economic Consequence of Fraudulent Financial Reporting of China's Listed Companies——Market Reaction on Publicity of Penalty by CSRC and Ministry of Finance …
en.cnki.com.cn [PDF]
… The first volume contains works written by leading psychologists that underlie behavioral finance, focusing on general issues in asset pricing theory, and the studies on over-reaction and under-reaction … Keywords: Economics and Finance (search for similar items in …

Uncertainty of climate policies and implications for economics and finance: An evolutionary economics approachUncertainty of climate policies and implications for economics and finance: An evolutionary economics approach
www.sciencedirect.com [PDF]
… The first volume contains works written by leading psychologists that underlie behavioral finance, focusing on general issues in asset pricing theory, and the studies on over-reaction and under-reaction … Keywords: Economics and Finance (search for similar items in …

Country responses and the reaction of the stock market to COVID-19—A preliminary expositionCountry responses and the reaction of the stock market to COVID-19—A preliminary exposition
www.tandfonline.com [PDF]
… The first volume contains works written by leading psychologists that underlie behavioral finance, focusing on general issues in asset pricing theory, and the studies on over-reaction and under-reaction … Keywords: Economics and Finance (search for similar items in …

Relative information asymmetry as a determinant of the market reaction to corporate financing announcementsRelative information asymmetry as a determinant of the market reaction to corporate financing announcements
link.springer.com [PDF]
… The first volume contains works written by leading psychologists that underlie behavioral finance, focusing on general issues in asset pricing theory, and the studies on over-reaction and under-reaction … Keywords: Economics and Finance (search for similar items in …

Who makes acquisitions? CEO overconfidence and the market's reactionWho makes acquisitions? CEO overconfidence and the market's reaction
www.sciencedirect.com [PDF]
… The first volume contains works written by leading psychologists that underlie behavioral finance, focusing on general issues in asset pricing theory, and the studies on over-reaction and under-reaction … Keywords: Economics and Finance (search for similar items in …

The Economics of Public FinanceThe Economics of Public Finance
www.jstor.org [PDF]
… The first volume contains works written by leading psychologists that underlie behavioral finance, focusing on general issues in asset pricing theory, and the studies on over-reaction and under-reaction … Keywords: Economics and Finance (search for similar items in …

The interrelations of finance and economics: Theoretical perspectivesThe interrelations of finance and economics: Theoretical perspectives
www.jstor.org [PDF]
… The first volume contains works written by leading psychologists that underlie behavioral finance, focusing on general issues in asset pricing theory, and the studies on over-reaction and under-reaction … Keywords: Economics and Finance (search for similar items in …

The economics of small business finance: The roles of private equity and debt markets in the financial growth cycleThe economics of small business finance: The roles of private equity and debt markets in the financial growth cycle
www.sciencedirect.com [PDF]
… The first volume contains works written by leading psychologists that underlie behavioral finance, focusing on general issues in asset pricing theory, and the studies on over-reaction and under-reaction … Keywords: Economics and Finance (search for similar items in …


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WCAG 2.0

Section 508