Price Ratchet

AAA

DEFINITION of 'Price Ratchet'

A trigger that increases or decreases a price of a share/asset by a certain amount. If you ratchet up the price of a stock, your actions are somehow causing the price of the stock to rise.

INVESTOPEDIA EXPLAINS 'Price Ratchet'

For example, many events that happen around the world, such as natural disasters or conflicts in the Middle East, can affect the gas prices. When a natural disaster or a new conflict causes an increase in gas prices, it is considered a ratchet.

RELATED TERMS
  1. Stock

    A type of security that signifies ownership in a corporation ...
  2. Parity Price

    When the price of an asset is directly linked to another price. ...
  3. Economics

    A social science that studies how individuals, governments, firms ...
  4. Full Ratchet

    An anti-dilution provision that, for any shares of common stock ...
  5. Equity

    1. A stock or any other security representing an ownership interest. ...
  6. Market Value

    The price an asset would fetch in the marketplace. Market value ...
Related Articles
  1. Investing

    What causes a significant move in the stock market?

    There is a nearly infinite number of factors that can cause the stock market to move significantly in one direction or another. This can include such things as economic data, geopolitical events ...
  2. Bonds & Fixed Income

    What are the benefits and drawbacks of owning preferred stock and common stock?

    Owning a share of a company can be accomplished through the purchase of common or preferred stock, but there are benefits and drawbacks for each option.
  3. Investing Basics

    What is the simplest kind of company stock?

    Learn about the simplest type of stocks. Explore growth and dividend investing strategies and examples of companies whose shares are available for investment.
  4. Investing Basics

    When is it beneficial for underwriters to sell stock below the minimum rate?

    Learn when selling stock below the minimum rate can be beneficial. Find out how the 1987 market crash affected an offering of British Petroleum shares.
  5. Investing Basics

    What is common stock and preferred stock?

    Learn about the differences between common and preferred shares. Explore situations where preferred shares have more favorable rights of ownership.
  6. Investing Basics

    Are over-the-counter stocks different from other stocks?

    Explore the difference between stocks traded over-the-counter and those listed on the NYSE or Nasdaq. Learn how price affects prospects for a stock.
  7. Investing Basics

    What assets are most risky and what assets are safest?

    Learn about the safest and riskiest assets to invest in. Explore savings accounts, T-bills, certificates of deposit, equities and derivatives.
  8. Investing Basics

    How do regulators ensure that markets are conducted at arm's length?

    Learn about arm's length transactions and how the Investment Advisers Act allows stockbrokers to sell securities based on suitability reviews.
  9. Investing Basics

    Are there any pure arm's-length markets?

    Learn about arm's length markets and transactions. Explore situations when different market participants may not be at arm's length.
  10. Options & Futures

    What is the difference between a short position and a short sale?

    Learn how short selling and short positioning are different, specifically in regards to the nature of the commodity being bought and sold.

You May Also Like

Hot Definitions
  1. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  2. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  3. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  4. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  5. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  6. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
Trading Center