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Strong Form of the EMT

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Strong form of the EMT
Theory that market prices reflect all relevant publicly and privately available information. Defined by Eugene F. Fama in 1970.

Strong Form of the EMT
The most controversial form of the efficient markets theory on how markets work. It holds that the market efficiently deals with all information on a given security and reflects it in the price immediately. Even insider information is immediately reflected in security prices. Therefore, the model holds that technical analysis, fundamental analysis, and any speculative investing based on them are useless. Investors and academics disagree on how well the model works. See also: Weak form of the EMT, Semi-strong form of the EMT.


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