Dry Hole

DEFINITION of 'Dry Hole'

A business venture that ends up being a loss. The buzz word "dry hole" was originally used in oil exploration to describe a well where no significant reserves of oil were found. This term is now often used to describe any fruitless commercial initiative.

BREAKING DOWN 'Dry Hole'

Newer businesses often run at a net loss for the first few years (while acquiring one-time expenses such as equipment and buildings) before becoming profitable; however, these are not usually referred to as dry holes. A dry hole is typically thought to never be able to produce a profit.

RELATED TERMS
  1. Dry Powder

    A slang term referring to marketable securities that are highly ...
  2. Dry Loan

    A mortgage where the funds are supplied after all of the required ...
  3. Dry Closing

    A type of real estate closing in which the entire closing requirements ...
  4. Development Well

    A well drilled in a proven producing area for the production ...
  5. Dry Bulk Commodity

    A commodity which is shipped in large, unpackaged amounts. There ...
  6. Trading Dollars

    A slang term describing a company that is spending just as much ...
Related Articles
  1. Active Trading Fundamentals

    Oil Exploration Companies Pose High Risk for Investors (NYSE ARCA: XOP, NYSE: PXD)

    Learn why oil exploration companies pose high risks for investors. Oil exploration stocks are highly leveraged to the price of crude oil.
  2. Trading Strategies

    Oil Boom 2.0: Be Sure You Are Ready to Invest

    Learn about the potential for oil boom 2.0, and discover why some experts say this is a good time to invest in oil companies and ETFs.
  3. Economics

    How Oil Prices Impact the U.S. Economy

    Now that the United States has increased oil production through shale oil and fracking, low oil prices can harm the U.S. oil industry and its workers.
  4. Active Trading

    How Does Crude Oil Affect Gas Prices?

    Find out how this commodity's fluctuating price affects more than just how much you pay at the pump.
  5. Economics

    Who Wins With Low Energy Prices? 

    Low oil prices are here to stay for some time. Which economies will benefit or lose from the low oil price regime?
  6. Active Trading

    What Determines Oil Prices?

    Changes in the price of oil aren't arbitrary. Read on to find out what moves them and why.
  7. Stock Analysis

    Is Now the Right Time to Buy Oil Stocks?

    Learn about the oil industry and how crude oil effects the prices of oil stock. Understand if now is a good time to purchase oil stock.
  8. Investing News

    Oil Prices Expected to Surge in 2017

    Oil has made headlines for its plummeting prices this year. When will prices rise again?
  9. Investing

    Who is Most Affected by Lower Oil Prices?

    With low oil prices affecting just about everyone, from citizens to corporations to entire nations, we look at who wins and who loses with the price drop.
  10. Mutual Funds & ETFs

    Take Advantage of Cheap Oil, Invest in these ETFs

    With crude oil prices at record lows, investors should consider oil ETFs over oil company stocks as ETFs more closely mirror the price of oil
RELATED FAQS
  1. What does it mean to have "dry powder"?

    The term "dry powder" originated during the days when military battles were fought with guns and cannons that used gun powder. ... Read Answer >>
  2. Which segment of the oil and gas sector is most vulnerable if oil prices drop?

    Learn which segment of the oil and gas sector is most vulnerable when oil prices drop. Oil prices dictate sentiment which ... Read Answer >>
  3. How are oil reserves accounted for on an oil company's balance sheet?

    Oil reserves are estimated quantities of crude oil that have a high degree of certainty, usually 90%, of existence and exploitability. ... Read Answer >>
  4. If oil producers run out of room to store oil, will the price of gasoline plummet?

    Learn about what happens to gasoline price when room to store oil runs out and whether this creates a good situation for ... Read Answer >>
  5. Why are stocks and oil so correlated right now?

    Learn whether the stock market and oil prices will continue their highly correlated price relationship or decouple again ... Read Answer >>
  6. What is a heavy oil differential and how does it affect oil producers?

    Learn what the phrase "heavy oil differential" refers to and the significance of heavy oil differentials for oil production ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center