Crowded Trade
A crowded trade describes a market situation where many participants appear to have similar exposure, expectations or positioning.
Why it matters to you
Crowded positioning can become important when market conditions change. If many leveraged traders attempt to reduce similar positions at the same time, the resulting buying or selling can accelerate a market move. However, crowded positioning alone does not tell traders when or whether a reversal will occur.
Terms that sit next to this one
See the perpetuals front
The tools, the live market and the course.