TY - JOUR AU - Webb, Robert I PY - 2016/07/20 Y2 - 2024/03/28 TI - Trading and Fat Tails JF - Applied Finance Letters JA - AFL VL - 1 IS - 1 SE - Articles submitted to regular issue DO - 10.24135/afl.v1i1.3 UR - https://ojs.aut.ac.nz/applied-finance-letters/article/view/3 SP - 2-7 AB - Sudden, large price changes periodically occur in speculative markets. Many of these large price moves simply reflect the market’s reaction to new fundamental economic information-- as financial theory would predict. However, some of the most extreme price moves—often characterized (albeit incorrectly) as “Black Swans” in popular parlance--reflect more the predictable behavior of traders in certain situations or poorly designed market microstructures than the arrival of new fundamental information. These trading-induced price moves have important implications for practitioners, policymakers and academics alike. ER -