Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Take a Bath

What it is:

To "take a bath" means to take a large loss.

How it works (Example):

John Doe buys Company XYZ shares at $10. Two weeks later, the stock tanks to $2 a share. John Doe has to sell the shares because he has to pay an outstanding tax bill and needs the cash. He sells at a big loss and takes a bath.

Why it Matters:

Much like cats, investors hate taking baths.