noise trader risk

Definition

A type of market risk that is closely related to the investment methods and decisions of noise traders. There is a much greater noise trader risk if there is more volatility in the market price for a specific security. Although this risk is found in all types of securities, it appears to be more prevalent in small cap stocks.
Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
noise trader NOK