Situation in which an investor is reluctant to sell a particularly profitable investment due to the tax consequences.
An investor is locked in when he finds a potential profit is reduced if he disposes of the security, e.g. through imposition of a tax measure. Also where he cannot establish or unwind a position due to a limit move. See Limit Up/Limit Down.
A situation that arises after a raid or a takeover where non-acceptation minority shareholders may have difficulty in selling their holdings.
An investor is said to be locked in when he has a profit on a security he owns but does not sell because his profit would immediately become subject to the capital gains tax.
Investors are said to be locked in when they have profit on a security they own but do not sell because their profit would immediately become subject to the capital gains tax.
1: Lingo used to indicate that a rate of return on an investment has been guaranteed for a specific length of time. Examples of such investments are certificate of deposits (CDs) and fixed rate bonds. See: Certificate Of Deposit; Fixed Income Investment; Rate Of Return 2: Said of a security whose profits or yields have been secured through use of a hedge. See: Hedging; Yield 3: Said about an investor who does not sell a profitable security because the profit would immediately be subject to capital gains tax. See: Capital Gain
When an investor has a profit on a security owned, but does not sell because of either the absence of a market or some legal restriction on the sale of the security. Also refers to an investor holding a security which has declined below the purchase price who cannot sell without incurring a loss.