Definition of panic buying or selling

flurry of buying or selling accompanied by high volume done in anticipation of sharply rising or falling prices. A sudden news event will trigger panic buying or selling, leaving investors little time to evaluate the fundamentals of individual stocks or bonds. Panic buying may be caused by an unexpected cut in interest rates or outcome of a political election. Short sellers may also be forced into panic buying if stock prices start to rise quickly, and they have to cover their short positions to prevent further losses. Panic selling may be set off by an international crisis such as a war or currency devaluation, the assassination of a head of state, or other unforeseen event. If stock prices start to fall sharply, investors may start to panic sell because they fear prices will fall much farther.