What is One Night Stand Investment?

Not to be confused with the common connotation of this phrase, a One Night Stand Investment is a security which has been purchased with the intention of long-term investment but is sold in the following day. Although they are similar in essence, One Night Stand Investments last for one night not because both parties (trader and security) involved understand that there are no follow-up meetings but because the buyer regrets buying said security.

The regret pushes the trader to panic and sell the security in an effort to correct his supposed mistake. One Night Stand Investments are often culprits for short-term losses and is often done by beginner traders who are still indecisive of their trading decisions.

Usually, One Night Stand Investments occur when a trader reviews a company or an industry and thinks that it is a stable investment. The trader invests however, because the market is volatile and changes can happen as fast as mere hours, retracts his investment due to a negative news. Sudden changes include acquisition, low profit, industry adjustments, etc. The trader panics and the investment is frantically sold.