Panic selling is a wide-scale selling of an investment, in order to get out of an investment (with little regard for the price obtained). The main problem is that investors react simply out of emotion and fear, without evaluating the fundamentals. Almost all market crash

Stock market crash

A stock market crash is a sudden dramatic decline of stock prices across a significant cross-section of a stock market, resulting in a significant loss of paper wealth. Crashes are driven by panic as much as by underlying economic factors...

es are caused by panic selling. Most major stock exchanges use trading curb

Trading curb

A trading curb, also known as a circuit breaker, is a point at which a stock market will stop trading for a period of time in response to substantial drops in value.-Circuit breakers:...

s to throttle the panic selling. This allows people to digest any important information regarding why the selling is occurring, and restore the normalcy of the market to some degree.