Black Swan

Dictionary Says

Definition of 'Black Swan'

An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult to predict. This term was popularized by Nassim Nicholas Taleb, a finance professor and former Wall Street trader.
Investopedia Says

Investopedia explains 'Black Swan'

Black swan events are typically random and unexpected. For example, the previously successful hedge fund Long Term Capital Management (LTCM) was driven into the ground as a result of the ripple effect caused by the Russian government's debt default. The Russian government's default represents a black swan event because none of LTCM's computer models could have predicted this event and its subsequent effects.

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Long-Term Capital Management - LTCM

    A large hedge ...
  2. Hedge Fund

    An aggressively ...
  3. Random Walk Theory

    The theory that ...
  4. Wall Street

    1. A street in ...
  5. Behavioral Finance

    A field of ...
  6. Dividend Signaling

    A theory that ...
  7. Anti-Fragility

    A postulated ...
  8. Probability Distribution

    A statistical ...
  9. Volatility

    1. A statistical ...
  10. Risk

    The chance that ...

Articles Of Interest

  1. A Brief History Of The Hedge Fund

    Find out how this U.S.-born investment innovation became a $1-trillion industry that's both praised and vilified by the media.
  2. Massive Hedge Fund Failures

    Flying high one day but not the next - see the stories behind some spectacular meltdowns.
  3. Black Swan Events And Investment

    These world-changing events are rare and difficult to predict, but the implications for your investments need to be taken seriously.
  4. Where did the bull and bear market get their names?

  5. Market Speculators: More Help Than Harm

    Speculators often get a bad rap, but it's important to remember that they only observe trends, not manipulate them.
  6. Mitigating Downside With The Sortino Ratio

    Differentiate between good and bad volatility with the Sortino Ratio.
  7. Quantitative Analysis Of Hedge Funds

    Hedge fund analysis requires more than just the metrics used to analyze mutual funds.
  8. Find The Right Fit With Probability Distributions

    Discover a few of the most popular probability distributions and how to calculate them.
  9. How To Survive The Trading Game

    Gain insight into how a trader/programmer approaches the task of designing a trading system.
  10. The Basics Of Business Forecasting

    Discover the methods behind financial forecasts and the risks inherent when we seek to predict the future.

comments powered by Disqus
Recommended
Loading, please wait...
Trading Center