Fat tail

'Fat tails' describes the greater likelihood of extreme market conditions, than predicted by conventional models of probability.

This pattern is also known as 'leptokurtosis'.

This means that the likelihood and size of extreme negative events is systematically underestimated by conventional statisitcal models.

See also

• Black swan
• CertFMM
• Frequency distribution
• Leptokurtic frequency distribution
• Leptokurtosis
• Normal frequency distribution
• Standard deviation
• Tail event
• Tail risk