DEFINITION of 'Sideways Market / Sideways Drift'

A sideways market occurs where the price trend of a certain trading instrument, such as a stock, has been experiencing neither an uptrend nor a downtrend. Instead, the price activity has been oscillating between a relatively narrow range without forming any distinct trends. A sideways market is said to be trading in a horizontal range or channel, with neither the bears nor the bulls taking control of prices.

BREAKING DOWN 'Sideways Market / Sideways Drift'

Market participants can exploit a sideways market by anticipating breakouts, either above or below the channel formed during the sideways market. Sideways markets are also referred to as choppy or non-trending. If the sideways drift is expected to remain for a long period of time, investor can earn profits by selling options with approaching expiration dates.

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