Bulge

DEFINITION of 'Bulge'

A fast increase in a security's or commodity's trading price. Bulge is an informal word with a meaning similar to the term bubble. A bulge occurs when an investment instrument's price rises quickly, often accompanied by increased volume. The price increases can continue over a period of hours, days or weeks, but a bulge is generally short-lived. A bulge is similar to a rally on equity exchanges.

BREAKING DOWN 'Bulge'

Prices for a particular instrument or sector might have strong support and continue to quickly rise, resulting in a temporary "bulge" in price. Bulges are characteristically fast moving and short-lived. Buying may continue until the security is overbought, and prices drop off, sometimes dramatically. Investors who jump on late, hoping that prices will continue to rise, often miss the move entirely due to its short-term nature.