Capitulation has multiple related meanings depending on the context:
- In general and historical terms, capitulation refers to an agreement or treaty during wartime in which one party surrenders to another, often involving conditions such as freedom of religion or protection of property. This can apply to troops, towns, or territories ceasing resistance to a hostile force. The term comes from Latin roots relating to treating upon terms or surrender.
- In international law history, capitulation can also mean a treaty where a sovereign state relinquishes jurisdiction over foreigners within its borders, allowing extraterritorial rights—different from military surrender but related to special legal privileges granted to foreign nationals.
- In finance and investing, capitulation describes a market phenomenon where investors panic-sell en masse during a sustained price decline, accepting losses rather than holding on and risking further drops. It marks a point where investors lose hope, often leading to very high trading volume and steep price drops. Notably, capitulation often signals a market bottom followed by a price rebound or relief rally, representing an end to the selling panic.
- More broadly, capitulation means the act of surrendering, yielding, or giving up in any context, such as negotiating under pressure or conceding a position.
In summary, capitulation can mean formal surrender during war, a legal treaty granting special rights to foreigners, or panic selling in financial markets, with the shared theme of giving up or yielding under pressure. The specific understanding depends on the context in which the term is used.
