What Is a Sellout?

In the context of finance and investing, the term “sellout” refers to a situation in which individuals or firms are forced to sell some or all of their assets to satisfy certain short-term obligations that cannot be met otherwise.

Sellouts can occur when an investor experiences substantial losses in a margin account. An example of a sellout would be a margin call, in which a broker forcefully liquidates a margin trader’s portfolio based on that trader’s failure to maintain adequate collateral.

Sellouts should not be confused with sell-offs, which involve a rapid decline in the prices of assets due to substantial selling pressure.