T
   
   Tail
   















 

T

Tail

(1) A reference to the ends of a probability distribution where the chances of an occurrence get relatively small. Some distributions, however, have fat tails, i.e., provide a relatively greater chance of a large price or rate movement and a smaller chance of a moderate movement than a standard normal distribution. (2) The residual of a risk pool as in the tail of remaining obligations out of a series of long-term liabilities under an insurance policy. (3) The change in the number of futures contracts needed to hedge a position because of variation margin flows. See Tail Hedging. (4) The number of excess futures contracts in a basis trade. (5) The difference between the average price and the lowest bid price in a Treasury auction.

Glossary * T