Strong Form Efficiency

AAA

DEFINITION of 'Strong Form Efficiency'

The strongest version of market efficiency. It states all information in a market, whether public or private, is accounted for in a stock price. Not even insider information could give an investor the advantage.

INVESTOPEDIA EXPLAINS 'Strong Form Efficiency'

This degree of market efficiency implies that profits exceeding normal returns cannot be made, regardless of the amount of research or information investors have access to.

RELATED TERMS
  1. Efficient Market Hypothesis - EMH

    An investment theory that states it is impossible to "beat the ...
  2. Weak Form Efficiency

    One of the different degrees of efficient market hypothesis (EMH) ...
  3. Fundamental Analysis

    A method of evaluating a security that entails attempting to ...
  4. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  5. Random Walk Theory

    The theory that stock price changes have the same distribution ...
  6. Semi-Strong Form Efficiency

    A class of EMH (Efficient Market Hypothesis) that implies all ...
Related Articles
  1. Understanding Investor Behavior
    Active Trading Fundamentals

    Understanding Investor Behavior

  2. What Is Market Efficiency?
    Active Trading

    What Is Market Efficiency?

  3. Efficient Market Hypothesis: Is The ...
    Active Trading Fundamentals

    Efficient Market Hypothesis: Is The ...

  4. How A Limited Government Affects A Country's ...
    Economics

    How A Limited Government Affects A Country's ...

Hot Definitions
  1. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  2. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  3. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  4. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  6. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
Trading Center