What is a sell of on the Stock Market?

Sell ​​of is an Anglo-Saxon term that is used in the field of stock market or stock market. It is probably one of the most frequent terms in a day with large falls and massive sale of shares or assets. To understand the concept well, it is important to know that different movements can occur in the stock market that cause an asset to increase in value (more purchases than sales) or, on the contrary, to fall (more sales than purchases). These movements can occur unexpectedly or as a result of action by catalytic agents.

When does a sell off occur?

Mainly a sell off or sales wave (in Spanish) occurs when investors are afraid or distrust the markets due to a news or action by catalysts. In response to this mistrust, investors close (sell) positions with the aim of minimizing the risk to their portfolios by producing a mass sale of assets.

Ultimately, this situation of uncertainty and panic is what ends up triggering a sell off, in other words, we can say that a wave of sales occurs as a result of the massive sale of shares. Mainly, according to the current investment model, this can happen since many traders have the same level of support and when the asset reaches that area; automatically executes the order to sell or "close" which causes this massive sale of shares.

For many it is a panic situation from the stock market point of view. However, a sell off tends to subside because many investors take advantage of the moment to buy falling shares motivated by obtaining profits in the future since they understand that it is an extreme fall in response to a certain agent.

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