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General TradingS
Sunk Cost
A cost that has already been incurred and cannot be recovered, regardless of future actions. In trading, the sunk cost fallacy leads traders to hold losing positions too long because they have already invested money or time, rather than cutting losses objectively.
Example
“He refused to sell his losing stock position because he had already lost $5,000 on it, a classic sunk cost fallacy that prevented him from deploying that capital more productively elsewhere.”