Holding The Market


DEFINITION of 'Holding The Market'

The practice of placing active or pending orders for a security into a market where the price is dropping rapidly in an attempt to "hold" the price of the security steady, or create a floor in the security. This practice is outlawed in most market instances, except when a broker or other party is mandated to keep the price of a security steady. This is only done in rare cases where there isn't enough market depth to hold the price.

Holding the market is also sometimes used as a slang phrase for owning a general market index such as the S&P 500 or Wilshire Total Market.

BREAKING DOWN 'Holding The Market'

Holding the market is hard to pull off these days because any one person would have to have very deep pockets to make a significant impact on a security's price. One of the things that keeps holding the market from occurring more frequently is that it is rarely profitable and can often lead to severe losses if prices do not rebound.

  1. Liquidity

    The degree to which an asset or security can be quickly bought ...
  2. Hoarding

    The purchase of large quantities of a commodity with the intent ...
  3. Wilshire 5000 Total Market Index ...

    A market capitalization-weighted index composed of more than ...
  4. Depth

    The ability of a security to absorb buy and sell orders without ...
  5. Floor

    The lowest acceptable limit as restricted by controlling parties. ...
  6. Manipulation

    The act of artificially inflating or deflating the price of a ...
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