Buy The Rumor / Sell The Fact | Bing

Buy the rumor. Bing

Bing -- World News Trust

Oct. 29, 2023

"Buy the rumor, sell the fact" is a common trading strategy that involves buying a stock or an asset when there is a positive rumor about it, and selling it when the rumor is confirmed by a factual event.

The idea behind this strategy is that the market often overreacts to rumors and anticipates the future impact of the event, driving the price up before it actually happens.

When the event occurs, the market may already have priced in the expected outcome, and there is little room for further appreciation.

Therefore, traders who bought the rumor may take profits and sell the fact, causing the price to drop or stagnate.