PREDATORY TRADING

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DC Field	Value	Language
dc.contributor.author	Brunnermeier, Markus K.	-
dc.contributor.author	Pedersen, Lasse Heje	-
dc.date.accessioned	2008-05-28T16:40:13Z	-
dc.date.available	2008-05-28T16:40:13Z	-
dc.date.issued	2003-12-10	-
dc.identifier.uri	http://hdl.handle.net/2451/26812	-
dc.description.abstract	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.	en
dc.language.iso	en_US	en
dc.relation.ispartofseries	S-DRP-03-14	en
dc.subject	Predation	en
dc.subject	Valuation	en
dc.subject	Liquidity	en
dc.subject	Risk Management	en
dc.subject	Systemic Risk	en
dc.title	PREDATORY TRADING	en
dc.type	Working Paper	en
Appears in Collections:	Derivatives Research

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