# Fat Tails

*Risk & Portfolio — Finicade finance glossary*

The tendency for extreme moves — crashes and spikes — to happen far more often than a bell curve predicts. Ignore fat tails and you'll badly underestimate the odds of disaster, as many risk models did.

**Also known as:** fat-tails-and-the-short-dated-smile

**Related terms:** [Normal Distribution](https://finicade.com/glossary/normal-distribution), [Value at Risk (VaR)](https://finicade.com/glossary/value-at-risk), [Stress Testing](https://finicade.com/glossary/stress-testing)

**Taught in:** Quant Quest — The Volatility Smile, Explained

Source: https://finicade.com/glossary/fat-tails