Definition of correction
- marking corrections on the students' papers
The teacher marked corrections on his students' tests.
Please make corrections before handing in your compositions.
the correction of your mistakes
people in need of vision correction
These example sentences are selected automatically from various online news sources to reflect current usage of the word 'correction.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
The stock market's value is always rising and falling. Sometimes, the market will experience short-term gains when nothing has really changed. These increases in value are usually caused by mass optimism on the part of investors anticipating gains. As more investors buy into the trend, the price increases. Once the price is high enough, buying slows, and some investors begin to sell to lock in their gains. This decrease in price, following a short-term increase, is called a correction.
For example, suppose there is a stock XYZ that is currently valued at $80. Anticipating gains, investors continue to purchase XYZ, and the price of the stock goes up to $100 over the next month. At the end of this month, some investors stop buying the stock at the higher price, and others start selling the stock to lock in their gains. Consequently, the market readjusts and the price of XYZ stock falls to $90 per share. Therefore, XYZ stock has experienced a correction of roughly 10%.
Corrections are usually tracked once an upswing in market prices has come and gone. A correction in a stock's price following an upswing is indicative of a stock's true market value and may not indicate a loss in value so much as a market's return to stability.
Corrections are a big part of technical analysis. Many investors use indicators to try to determine when the correction will begin and end so that they can buy when prices are lower.
: a change that makes something right, true, accurate, etc.
: the act of making something (such as an error or a bad condition) accurate or better : the act of correcting something
: the act or process of punishing and changing the behavior of people who have committed crimes ( US )
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