> ## Documentation Index
> Fetch the complete documentation index at: https://docs.gdeltcloud.com/llms.txt
> Use this file to discover all available pages before exploring further.

# market_sensitivity

> How directly an event attaches to something actually traded — reasonable-investor materiality, unsigned.

**Range 0–1.**

<Warning>
  **Not a predicted price move and not a direction.** It is an unsigned materiality signal. CJEU *Lafonta v AMF*
  (C-628/13, 2015) is precisely the authority for this: information can be "precise" without indicating which
  way a price will go.
</Warning>

## Formula

```
if claim_exposure ≤ 0.05  →  0

market_sensitivity = (claim_exposure + economic_bite) / 2
```

`claim_exposure` gates. If nothing traded is exposed, there is nothing to be sensitive, so the score is `0`.

## Variables

### `claim_exposure` — how directly a traded claim is involved

Judge whether a traded claim **exists in the world**, not whether the article mentions markets. Pick one rung:

| Value | Meaning                                                                                                                           |
| ----- | --------------------------------------------------------------------------------------------------------------------------------- |
| 0.00  | Nothing traded exposed, even indirectly                                                                                           |
| 0.10  | **Generic only** — the country merely has traded debt or a currency. Most local crime, protest and domestic politics belongs here |
| 0.35  | A named sector or commodity complex, exposed through a stated mechanism                                                           |
| 0.60  | A specific traded claim identifiable, but not the point of the event                                                              |
| 0.80  | That claim is the **subject**, acted on first-order                                                                               |
| 1.00  | The event sets the **terms** of the claim itself                                                                                  |

<Info>
  **On sophisticated investors.** A specialist can express almost any view through proxies, contracts or
  private markets — so "could someone trade it?" is true everywhere and discriminates nothing. The rung asks
  **how directly** the event attaches to a claim that actually exists. A traded claim is broader than a listed
  share: sovereign debt, exchange-traded commodities, credit and contractual claims, an asset freeze, an
  insurance exposure, and a major private company with an active secondary market or listed backers all count.
</Info>

### `economic_bite` — whether something has already happened

Score what has **already occurred**. Do not forecast, and do not reason about what was priced in.

| Value | Meaning                                                                  |
| ----- | ------------------------------------------------------------------------ |
| 0.00  | Pure speech or symbolism — an accusation, an appeal, a ceremony          |
| 0.20  | A procedural step with no operative effect yet — an investigation opened |
| 0.40  | A real but bounded operative effect                                      |
| 0.60  | A binding in-force effect on the claim                                   |
| 0.80  | A large in-force effect on core economics                                |
| 1.00  | The claim's basic economics or legal status changes                      |

## Grounding

The **reasonable-investor materiality** test: *TSC Industries v. Northway* (1976) and *Basic v. Levinson*
(1988); SEC **SAB 99** and the 2023 cyber-disclosure rule (Form 8-K Item 1.05); **MAR Art. 7(4)** with ESMA
guidance; ASX Listing Rule 3.1 / GN8; IFRS S1/S2.

**Our adaptation:** those regimes ask a binary — *must this be disclosed?* We need a graded score, so the two
limbs are scored on rungs and averaged. An earlier version multiplied by a `surprise` term; it was **retired**
because "how much was already priced in" is a market-state question the coder cannot answer from an article,
and multiplying by it drove nearly every score to zero.

## Worked examples

> Anthropic's \$1.5bn copyright settlement approved

| Variable         | Value | Coder's reason                                                                                      |
| ---------------- | ----- | --------------------------------------------------------------------------------------------------- |
| `claim_exposure` | 0.80  | Acts directly on the company's own legal and contractual claim through a court-approved settlement. |
| `economic_bite`  | 0.80  | Approval makes a large obligation operative — cash flow and legal standing now, not later.          |

```
(0.80 + 0.80) / 2 = 0.80
```

> Nationwide power grid blackout in Havana — **why a huge event scores low**

| Variable         | Value | Coder's reason                                                                                  |
| ---------------- | ----- | ----------------------------------------------------------------------------------------------- |
| `claim_exposure` | 0.10  | No specific traded company or contract identified; exposure is generic sovereign/currency only. |
| `economic_bite`  | 0.80  | Already in force nationwide, disrupting core economic capacity.                                 |

```
(0.10 + 0.80) / 2 = 0.45
```

This is the metric working, not failing. The blackout is severe — `magnitude` 7, `systemic_importance` 0.85 —
but almost nothing traded attaches to it. `market_sensitivity` measures **attachment to a traded claim**, not
how bad an event is.

## Stability

Run-to-run noise **±0.030**; smallest defensible difference **0.06**. Only **1.5%** of events attach to an
identifiable traded instrument.