Debitoor's accounting dictionary
Near term

Near term - What is near term?

Near term refers to business events that are expected to occur not too far in the future, it can also refer to predicted stock fluctuations

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The use of ‘near term’ in a business context is often related to financial events such as the earnings a company expects within a shorter period of time. Near term is also used by traders in regards to changes in stock prices that are anticipated relatively soon.

Business use of near term

There is no specific period of time that can be considered near term. However, many businesses might use this to refer to expected changes or activities within the current quarter, for example.

Near term is often used in the launching of new marketing campaigns, as well as the launch of a new product. Typically, it is only used when these activities will be happening within the next few months.

If an event is expected in the following business year or in a time period that is generally considered more long term, ‘near term’ would not be used.

Near term as used in Economics

‘Near term’ is also used in economics, referring to the expected growth of a particular measure of the economy. This can include for example, consumer spending forecasts and gross domestic product (GDP).

Trading and near term

When it comes to trading, near term is often used for short term trades. For example, if a trader chooses an entry point before an earnings release date, then holds on to their position to see whether the stock rises or falls after the entry date, the trade will only last 2-3 weeks and will be considered near term.

However, day traders might also consider near term to be in the range of as little as 5-10 minutes.

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