capitulation

noun

ca·pit·u·la·tion | \ kə-ˌpi-chə-ˈlā-shən

Definition of capitulation

1 : a set of terms or articles (see article sense 1c) constituting an agreement between governments

2a : the act of surrendering or yielding the capitulation of the defenders of the besieged town

b : the terms of surrender

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Examples of capitulation in a Sentence

her sudden capitulation surprised everyone; she usually debated for hours

Recent Examples on the Web

Victoria’s Secret hired its first openly transgender model, a capitulation from chief marketing officer Ed Razek’s stance as recently as last fall. — Jordyn Holman, Fortune, "Victoria’s Secret Hires its First Transgender Model," 5 Aug. 2019 By 1969, however, the Soviet Union was out of the race to the moon, a capitulation that anticipated the Soviets’ expiring gasp, two decades later, when confronted by the technological challenge of Ronald Reagan’s Strategic Defense Initiative. — George Will, Twin Cities, "George Will: Apollo 11’s achievement still dazzles," 18 July 2019 Even full capitulation to the original demands of the anti-extradition marches is unlikely to send them home, especially as, given that schools and universities are on summer break. — James Griffiths, CNN, "The fight over Hong Kong's extradition law could reopen divisions," 1 July 2019 This just goes to show the levels of capitulation that Manchester United have shown in more recent times. — SI.com, "Bruno Fernandes: Why the Portuguese Superstar Should Be Man Utd's Next Big-Money Signing," 2 July 2019 Who will hate this candidate: Progressive Democrats who see Ryan’s style as more capitulation than compromise. — Quartz Staff, Quartz, "Meet all the Democratic candidates in the crowded 2020 race," 24 June 2019 Right now even though President Trump talks about his interest in engaging with the Iranians the actions that compose American strategy seem aimed much more at producing either the capitulation of this Iranian leadership or its implosion. — CBS News, "Transcript: Bill Burns and Jim Miller talk with Michael Morell on "Intelligence Matters"," 21 June 2019 But these deals invariably hinge on the near-complete capitulation of the demandeur. — Simon Nixon, WSJ, "Britain’s Brexit Dilemma: Should It Compromise, or Confront the EU?," 4 July 2018 If the Jews had no connection to the land, recognizing Israel would be a capitulation and a humiliation. — Max Singer, WSJ, "Refute Palestinian Lies to Promote Mideast Peace," 6 Dec. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'capitulation.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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Last Updated

12 Sep 2019

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The first known use of capitulation was in 1535

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More Definitions for capitulation

capitulation

noun

Financial Definition of capitulation

What It Is

Capitulation occurs when investors attempt to exit an investment or market so quickly that they are willing to surrender any and all gains to do so. Panicked behavior often causes a capitulation, and investors may attempt to liquidate most or all of their holdings in these circumstances.

How It Works

A capitulation frequently occurs after a security or a market has endured a long, downward slide in value; it is the final act of hitting bottom. There are four general signs a capitulation is occurring or has occurred.

Significant Changes in Trading Activity
Capitulations commonly involve unusually high trading volumes and price declines, typically over one or two trading days (although they can last longer).

High Levels of Cash Held by Mutual Funds
The presence of large numbers of investors attempting to exit the market by selling their Mutual Fund shares frequently compels mutual funds to hold high levels of cash in order to meet those demands.

Unusually High Derivatives Activity
Large increases in put purchases or option volatility indexes indicate that investors are either strongly betting against a market increase or are rapidly attempting to hedge against expected price declines.

Continued and Profound Negative Investor Sentiment
Capitulations are most frequently attributed to investors emotionally "giving up," rather than to external forces like changes in the fundamental outlook of a company. This negative investor sentiment may be the cause (or effect) of reaction and opinion communicated by the media, analysts, traders, or other investors.

Why It Matters

There is no guaranteed way to spot capitulation before it happens or while it is happening. However, because capitulations generally reflect the final bottoming-out of a security or market, prices typically increase after a capitulation. Thus, capitulations can also signal the beginning of a turnaround.

Source: Investing Answers

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