Dead Money
A stock stuck for a while, neither rising nor falling — a phrase for money locked up, eating only opportunity cost.
In plain terms
Dead money means "money that is dead." It refers to a stock you bought that neither rises nor falls and stays put for a long time. The money is tied up, not working.
It may be no big loss, but you miss the chance you would have earned investing that money elsewhere. This is called "opportunity cost." Dead money is the frustrating state of eating time even without a loss.
What it tells you
Dead money reminds you that "loss is not the only risk." A long-stagnant stock makes you lose time and opportunity even without losing.
But "dead money now" is not so forever. Some quietly build value and then move big at some point, so look at the reason for the stagnation.
Formula
dead money = a stock (or money tied up in such an asset) stagnant for a long time with no meaningful move
What high or low means
A company in a stagnant phase, neither growing nor declining, or a stock that drifted from market attention, easily becomes dead money.
Whether the stagnation is "because results are bad" or "because the market has not noticed yet" changes the meaning. The former is a risk; the latter may be worth waiting for.
"It's dead money, so sell fast and switch" is not always right. If it is stagnant because the market has not noticed good fundamentals, patience can be rewarded. Conversely, stagnation may be the start of decline, so look at the reason. (This is a concept explainer, not a trading suggestion.)
Selling a good but stagnant stock out of impatience and chasing only "moving" stocks can repeat the mistake of hopping on at the tail end of a trend.
Metrics to read alongside
See it in real stocks
Search US stocks on Stocklore to see Dead and other financial metrics alongside the sector average.
This explanation is for information and reference only and is not a recommendation to buy or sell any security. Investment decisions and their consequences are your own.