Stock overhang

Stock overhang is a phrase used to describe a sizeable block of shares which, if it were to be released in the market in one go, would flood it, and so depress prices.

Stock overhang is a phrase used to describe a sizeable block of shares (or, for that matter, of securities, commodities, contracts, and so on) which, if it were to be released in the market in one go, would flood it, and so put downward pressure on prices.

For example, if an institutional investor is known to be trying to offload a large holding, it is said to be overhanging the market. This will tend to depress the share price of the company concerned until all the stock has been sold.

Other examples might be shares held in a dealer's inventory or a large commodity position about to be liquidated. If you become aware of the overhang early enough, your best bet might be to sell.

Most Popular

UK house prices are definitely cooling off – but are they heading for a fall?
House prices

UK house prices are definitely cooling off – but are they heading for a fall?

UK house prices hit a fresh high in June, but as interest rates start to rise, the market is cooling John Stepek assesses just how much of an effect h…
30 Jun 2022
The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves looks at the FTSE 100’s top yielding stocks for income investors to consider.
22 Jun 2022
Five dividend stocks to beat inflation
Share tips

Five dividend stocks to beat inflation

During periods of high inflation, dividend stocks tend to do better than the wider market. Here, Rupert Hargreaves pick five dividend stocks for incom…
30 Jun 2022