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behavioral

Panic Harvesting

"Buys forced selling at irrational prices"

Providing liquidity when no one else will. Buying high-quality assets during moments of forced liquidation or extreme fear.

How It Works

  1. 1

    Wait for 'capitulation' event (VIX spike, margin calls)

  2. 2

    Identify forced sellers (funds blowing up, indiscriminate selling)

  3. 3

    Bid well below intrinsic value

  4. 4

    Hold through the volatility squall

  5. 5

    Profit as rationality returns

Key Mechanics

Liquidity premium

Mean reversion

Margin call mechanics

Bid-ask spread widening

Regulatory Context

Legal and encouraged (provides market stability). 'Circuit breakers' may pause trading.