A particularly gruesome, yet oft-used stock/security trading analogy.

A "dead cat bounce" refers to a temporary increase in value some stocks may experience a few days or weeks before the final collapse of the firm in question.

For example, if Enron stock tumbled from $90 a share to $5 a share, then shot back up to $8 a share, some optimistic investors may see this as a sign that the company is regrouping and making positive steps back toward double digits. If the stock then falls to $0.0003 a share, the investors can then be said to have made the mistake of "losing one's money on a dead cat bounce."

Presumably, the name "dead cat bounce" comes from the idea that if a cat plummets from a high enough distance, then bounces upward off the ground, that final movement shouldn't be seen as evidence that the cat is still alive. Similarly, if a stock plummets in value and then experiences a last-minute jump in price, one should not assume that the company is still "alive" (i.e. viable).

Stock analysts and brokerage firms will often attempt to warn their investors if they believe an increase in a certain security's value is a "dead cat bounce" rather than a legitimate comeback.