What Is 'Panic Buying'?

Panic buying is a type of behavior marked by a rapid increase in purchase volume, typically causing the price of a good or security to increase. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Term of the Day | Words to Know Panic Buying Panic buying is a type of behavior marked by a rapid increase in purchase volume, typically causing the price of a good or security to increase. From a macro perspective, panic buying reduces supply and creates higher demand, leading to higher price inflation. On a micro level (e.g. in investment markets), fear of missing out (FOMO) or buying triggered by a short squeeze can exacerbate panic buying, into a so-called melt-up. Fear of a shortage of the good is another potential reason for panic buying. Panic buying can be contrasted with panic selling, in which people sell a good in large volumes, driving its price down, usually caused by a fear of a market crash. Read More » Related to "Panic Buying" Warren Buffett: Be Fearful When Others Are Greedy The fear that leads to superior investment opportunities may be caused by macroeconomic events or short-term, non-moat damaging business results. Read More » How Do Asset Bubbles Cause Recessions? Understand how asset bubbles often lead to deep, protracted recessions. Read about historical examples of recessions preceded by asset bubbles. Read More » SPONSORED BY INVESCO The Complete Guide to ETFs ETFs are becoming increasingly popular and soaring to new heights among investors. Invesco's insights can help you determine if these investment vehicles are right for you. Learn More » What Causes Inflation and Who Profits From It? In this article, we examine the fundamental factors behind inflation, different types of inflation, and who benefits from it. Read More » Sign Up for 'The Express' Want more Investopedia market news? Get market insights and financial headlines before the opening bell. Make your mornings more enjoyable, for free. Check it Out » Related Definitions Melt Up A melt up is a dramatic and unexpected improvement in the investment performance of an asset class, driven partly by a stampede of investors who don't want to miss out on its rise. Read More » Market Maker Market makers compete for customer order flow by displaying buy and sell quotations for a guaranteed number of shares. Read More » Price Inflation Price inflation is the increase in a collection of goods and services over a certain time period. Read More » Panic Selling Panic selling refers to the sudden, wide-scale selling of a security or securities by a large number of investors, causing a sharp decline in price. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2020, Investopedia, LLC, All Rights Reserved | Privacy Policy