Definition of bail-out

In stock trading, an investor bails out of a stock if he quickly sells all or most of his holdings despite a bad price, for instance because the share price is falling sharply and he does not want to sustain further losses.

The term, as a noun or verb, is also used to describe the rescue of a person, country, company or organisation in severe financial difficulties, for example by the injection of cash or the provision of loan guarantees.