Meaning
Buy the rumour, sell the fact describes a price that rises while traders expect good news and then falls once the news is officially confirmed.
The same idea is often written as buy the rumour, sell the news. When traders talk about "sell the news trading", they mean this reaction after an announcement.
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Formal definition
Market prices already include what traders expect to happen. This is called being "priced in". When an event is scheduled, such as a central bank decision, an earnings release or a data report, traders build positions in advance based on the consensus forecast.
At the release, the price reacts mostly to the surprise, which is the gap between the actual result and what was expected. If the result matches expectations, there is little new information. Traders who bought in advance then close their positions to take profit, and that selling can push the price down even though the news itself was positive.
The mirror case, sell the rumour, buy the fact, happens when prices fall ahead of expected bad news and recover after it is confirmed.
Worked example (hypothetical)
Suppose traders expect a central bank to raise its policy rate. In the weeks before the meeting, the currency strengthens because higher rates tend to attract capital. On the day, the bank raises the rate exactly as forecast. Within hours, the currency weakens and gives back much of its gain, because early buyers are taking profit and no new information arrived.
Scheduled decisions like the SBP's are typical events where this can happen. A recent example: SBP policy rate raised by 50 bps to 12% with effect from 27.10.2026 (MPC). Whether the market reacted this way to that decision is not something this page claims. It is shown only as the type of announcement the phrase refers to.
To see what a move of a given size would mean for a position, enter your own figures in the trading calculators.
Edge cases
- Bigger surprise than expected. If the actual result beats the consensus clearly, the trend can continue after the news instead of reversing.
- Leaks and early pricing. If the news leaks before the official release, the "fact" moment may produce little movement.
- Volatility drop. Before major events, option prices often include extra uncertainty. After the release, that uncertainty disappears and implied volatility can fall sharply, even when the price itself barely moves.
- Hindsight label. The phrase describes a pattern after it has happened. It is not a rule, and it does not reliably predict what price will do.
Leveraged CFD and forex trading around news can lose money fast. Spreads can widen and prices can gap at the moment of release. See risk management.
Where you see the term
- News and market reports: used in headlines after a rally fades on confirmed good news, such as after a rate decision, an earnings beat or a crypto event like the Bitcoin halving.
- Analyst commentary: used to explain why price fell "despite" positive data.
- Platforms: the term itself does not appear in MetaTrader 5, but the economic calendar there lists scheduled events, often with forecast and actual values. The gap between those values is the surprise described above.
Related terms
- Fundamental analysis covers how news and data affect prices.
- Basis point is the unit used for rate changes.
- Contrarian investing means positioning against crowd expectations.
- Dead cat bounce is a short recovery during a decline.
- Market correction and capitulation describe other kinds of reversals.
- Trading psychology explains how crowd behaviour shapes these moves.
- The full list is in the trading glossary.
Frequently asked questions
Is "buy the rumour, sell the news" the same as "sell the fact"?
Yes. Both phrases describe the same pattern: price rises on expectation and falls after confirmation.
Does the price always reverse after the news?
No. It depends on the surprise. A result far from the forecast can extend the move instead of reversing it.
Is this a trading strategy?
It is a description of market behaviour, not a reliable rule. Trading around news carries high risk, especially with leverage.
What does "priced in" mean?
It means current prices already reflect information or expectations that traders widely share, so confirming that information adds little to the price.
