DEFINITION of 'Dead Money'

A slang term for money invested in a security with minor hopes of appreciation or earning a return. The stock may also be referred as dead money by analysts, as a warning to investors who might purchase the shares.

BREAKING DOWN 'Dead Money'

Funds that are not earning interest or income are known as dead money. Some investors will hold a stock despite recent price drops, hoping that it will turn around and earn back some of the lost value. However, if the investment is dead money, the likelihood of a turnaround is low, and investors should consider selling the shares before incurring additional losses.

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RELATED FAQS
  1. What is dead money?

    Dead money is a common term used on Wall Street to describe money that does not earn a return for an investor. It could be ... Read Answer >>
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    Identify the small rally characteristic of a dead cat bounce pattern as a technical trading pattern indicative of a strong, ... Read Answer >>
  3. How can a trader profit from a Dead Cat Bounce pattern?

    Profit from the dead cat bounce chart pattern by using the small, short-lived move upward to initiate a low-risk short position ... Read Answer >>
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