Smart Money Exit

A smart money exit refers to the strategic liquidation of positions by institutional investors, hedge funds, or insiders who possess superior market insight or information. These entities often begin selling into strength while retail traders are still buying, creating the distribution phase of a market top.

Their exit is typically gradual and calculated to avoid triggering a panic that would lower their average selling price. By the time the general public recognizes the trend has changed, smart money has already shifted to a net short or cash position.

This behavior is a cornerstone of market cycle analysis, as it highlights the disparity in information and capital between different market participants.