If a stocks price is $100, and tomorrow there will be a news event where there is a 50% chance it will be worth $50, and a 50% chance it will be worth $200, the trading value today should probably be around $125 (it's expected value or EV, $200 + $50 / 2).

When the defining event actually occurs, it will either move from $125 to $50, or $125 to $200.

So the news event in this example is priced in at $125, but there is still scope for big moves when certainty is realised.

Obviously in real life the values are never as certain. In the above example if the stocks ever trades < $125 before the event, you would make money in the long run.

EMH shouldn't be taken seriously as the market actors are compromised of irrational humans.

Just going to plug a book here that was an awesome read in my undergrad on that topic, and the history of quant finance over the 20th / early 21st centuries: https://byjustinfox.com/myth-of-the-rational-market/

Thanks ... (it seems I can't find your username, how odd)

I really appreciate the guidance as I'm quite new to it. Especially so because you're enthusiastic about this book :D

everybody who knows about efficient market hypothesis knows that it's assumptions aren't applicable to the real world and it doesn't really matter; the real problem is those folks who mindlessly repeat propaganda about markets being rational or fair or generally doing the right thing when they clearly aren't.

Well, it's bullshit x)