A type of endogenous risk that arises from within the financial system where market participants attempt to outsmart, intercept and impede the expectations of other participants (simply, a game against others). In other words, it the non-linear risk created by an unexplained market volatility that does not relate to specific factors. These represent the risks when a pricing model is not available to explain what is going on.
Like its original category, this risk is non-fundamental or associated with technical factors- mainly a reaction to support or resistance in the market price. Other examples, that are based on internal factors within a market or sector include the risk to bandwagon or momentum effects.
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