Predatory trading
By: Markus K. Brunnermeier, Lasse Heje Pedersen.
Contributors: National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10755; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10755.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Futures.; Liquidity (Economics); Risk management.
Description: "This paper studies predatory trading: trading that induces and/or exploits other investors' need to reduce their positions.  We show that if one trader needs to sell, others also sell and subsequently buy back the asset.  This leads to price overshooting and a reduced liquidation value for the distressed trader.  Hence, the market is illiquid when liquidity is most needed.  Further, a trader profits from triggering another trader's crisis, and the crisis can spill over across traders and across markets"--National Bureau of Economic Research web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 1/12/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.