Downside

DEFINITION of 'Downside'

The negative movement in the price of a security, sector or market. Downside can also refer to economic conditions and it describes periods when an economy has either stopped growing or is shrinking. Movement to the downside is often expressed in terms of risk, as in there is a downside risk in a particular country's economy; or, stock ABC has downside risk because of changing consumer trends. Downside risk can be evaluated by fundamental and technical factors.

BREAKING DOWN 'Downside'

Downside risk is sometimes expressed in terms of an estimation of a security or economy's potential to experience negative movement. A stock analyst, for example, might guess how big a price drop he or she expects stock ABC will endure because of certain events. Economists can estimate the downside risk a country's economy is likely to suffer due to current conditions, such as unemployment and GDP growth.

RELATED TERMS
  1. Downside Risk

    An estimation of a security's potential to suffer a decline in ...
  2. Economic Conditions

    The state of the economy in a country or region. Economic conditions ...
  3. Technical Rally

    An upward movement in a security's price following a declining ...
  4. Downside Deviation

    A measure of downside risk that focuses on returns that fall ...
  5. In The Pink

    An informal expression used to describe a situation in which ...
  6. Country Risk

    A collection of risks associated with investing in a foreign ...
Related Articles
  1. Technical Indicators

    Understanding Trend Analysis

    Trend analysis is the use of past performance to predict future price movement of a security.
  2. Term

    Swing Trading Risks and Rewards

    Swing trading is the attempt to capture gains in a stock within one to four days.
  3. Economics

    These Will Be the World's Top Economies in 2020

    Discover the current economic forces that are anticipated to significantly shift the landscape of the world's most powerful economies over the next decade.
  4. Investing Basics

    Explaining Buy Limit Orders

    A buy limit order allows traders and investors to specify the price that they are willing to pay for a security, such as a stock.
  5. Economics

    What Does an Underwriter Do?

    In the investment world, an underwriter is a company that helps corporations or other issuing bodies distribute their securities.
  6. Investing Basics

    What is a Leading Indicator?

    A leading indicator is a measurable economic factor that tends to change right before the economy starts to change.
  7. Investing

    Which Countries Will Drive Global Growth in 2016?

    Given the volatility that has already shaken the global economy, the world's largest economies will be leaned on to stimulate growth in 2016
  8. Investing

    What's Capitalization?

    Capitalization has different meanings depending on the context.
  9. Forex Education

    The Fundamentals Of Forex Fundamentals

    Charting is not the only way to analyze the foreign-exchange market. Learn how to apply fundamental analysis to the economic indicators.
  10. Chart Advisor

    Four Stocks Setting Up For A Move Lower

    These four stocks have recently broken out of chart patterns, indicting further moves in the breakout direction.
RELATED FAQS
  1. What is the difference between market risk and country risk?

    Learn about market risk and country risk, some examples of each and the main difference between these two types of risks. Read Answer >>
  2. How risky is a covered call?

    Learn what a covered call strategy is, how investors use it, and the risk of a covered call strategy and how it offers limited ... Read Answer >>
  3. Why is the Ease Of Movement Indicator important for traders and analysts?

    Read more about the ease of movement indicator, a technical momentum oscillator created by Richard Arms to track price changes ... Read Answer >>
  4. What are the primary sources of market risk?

    Learn about market risk and the four primary sources of market risk including equity, interest rate, foreign exchange and ... Read Answer >>
  5. Why are mutual funds subject to market risk?

    Find out why mutual funds, like all investments, are subject to market risk, including how the different types of market ... Read Answer >>
  6. If ABC corporation, which is listed on the New York Stock Exchange ...

    The correct answer is d). This transaction would qualify under two different exemptions – the first because it is an exchange ... Read Answer >>
Hot Definitions
  1. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  2. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  3. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  4. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  5. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  6. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
Trading Center