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Finance Glossary

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Over 700 finance terms, Shmooped to perfection.

Break Out

Definition:

It can refer to that thing that ruins your Saturday night date and makes you wish for darkness and Oxy 10. But it also refers to a stock which has "broken out" of its expected trading pattern. If a stock suddenly jumps up in price (or tanks) after chugging along steadily, it's a breakout. 

Example

A stock traded in a very flat U shaped pattern for the last 10 months between $17 and $19; then, suddenly with their recent earnings announcement, the stock's first print at 9:30AM is $26. The new pattern created from that $26 is a break out.