Define: Whipsaw

Business, Legal & Accounting Glossary

Definition: Whipsaw



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Full Definition of Whipsaw


Whipsaw refers to the rapid movement of stock prices, either up or down, in a volatile market. In other words, when a share price moves in one direction but abruptly reverses, it is known as a whipsaw. Some investors jump on the stock before it has reversed and caused the whipsaw. Thus a whipsaw can cause an investor to lose money. The investor loses money from a whipsaw by buying a stock right before the price falls or by selling a stock just before the price rises. Whipsaw is therefore related to “chasing the market,” when an investor seems to lag behind the market. A whipsaw is dangerous to traders because it throws up an initially misleading signal to buy or sell. Because of the whipsaw condition, a volatile market can punish active traders.


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Whipsaw. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. April 05, 2020 https://payrollheaven.com/define/whipsaw/.
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Whipsaw. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/whipsaw/ (accessed: April 05, 2020).
American Psychological Association (APA):
Whipsaw. PayrollHeaven.com. Retrieved April 05, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/whipsaw/

Definition Sources


Definitions for Whipsaw are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 5th February, 2020