A rare, severe, almost impossible-to-predict event that upends markets when it happens.
A black swan event is a term for something rare, extreme, and almost impossible to predict in advance, that ends up having an outsized impact once it happens, a financial crisis, a pandemic, a sudden war. The name comes from the historical assumption that all swans were white until black swans were actually discovered, a reminder that just because something has never happened doesn't mean it can't. Markets are generally priced assuming conditions stay roughly normal, which is exactly why a genuine black swan event can cause such violent, fast-moving reactions when it arrives.
Part of the Open Bell Glossary — plain-English explanations of the terms that come up on the show. Browse every term.