Hockey Stick Bidding

AAA

DEFINITION of 'Hockey Stick Bidding'

An anti-competitive bidding practice in which a market participant (or trader) offers an extremely high price for a small portion of a good.

The name derives from the price curve of this practice, which resembles a hockey stick.

INVESTOPEDIA EXPLAINS 'Hockey Stick Bidding'

This is considered to be a fraudulent practice of pushing up prices. Market participants submit offers at extremely high prices because they know that the demand for their good is sure to be high.

A good example of this occurred during the California energy crisis of 2001. Energy traders knew that California would need all available power and would be willing to pay any price to get it.

RELATED TERMS
  1. Commodity

    1. A basic good used in commerce that is interchangeable with ...
  2. Bid

    1. An offer made by an investor, a trader or a dealer to buy ...
  3. In The Penalty Box

    A phrase referring to a company whose stock has plummeted with ...
  4. Monopoly

    A situation in which a single company or group owns all or nearly ...
  5. Price Discovery

    A method of determining the price for a specific commodity or ...
  6. Price Basing

    A method of pricing commercial commodity transactions that bases ...
Related Articles
  1. Online Investment Scams Tutorial
    Economics

    Online Investment Scams Tutorial

  2. Biggest Stock Scams
    Personal Finance

    Biggest Stock Scams

  3. The Biggest Stock Scams Of All Time
    Investing

    The Biggest Stock Scams Of All Time

  4. Playing The Sleuth In A Scandal Stock
    Investing Basics

    Playing The Sleuth In A Scandal Stock

comments powered by Disqus
Hot Definitions
  1. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  2. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  3. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  4. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  5. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  6. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
Trading Center