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| Author: | Vitale, P. |
| Title: | Speculative noise trading and manipulation in the foreign exchange market |
| Journal: | Journal of International Money and Finance
2000 : OCT, VOL. 19:5, p. 689-712 |
| Index terms: | FOREIGN EXCHANGE MARKET SPECULATION FINANCE |
| Language: | eng |
| Abstract: | The author investigates the possibility that in the foreign exchange rate market uninformed speculators find it convenient to trade on noise in order to gain an informational advantage they can exploit in future. In a two-period model, the author analyzes the trade-off between the cost of the "infomational investment" and the profits this brings about, studying the optimal manipulation strategy under different hypotheses on the activity of market participants. |
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