Definition
Catalysts include earnings reports, product launches, clinical trial results, regulatory decisions, contract wins, analyst changes and index inclusions. A stock can stay cheap or expensive for a long time without one.
How it is used
Traders and investors track upcoming catalysts on a calendar to understand why a stock might move and when.
Watch out for
Knowing a catalyst is coming does not tell you which way the stock will react, since expectations are already in the price.