Trading Hours and Retail Investment Performance

This paper examines the effects of stock market access, and in particular trading hours, on retail investment performance. We find that plausibly exogenous increases in trading hours are associated with meaningful declines in retail investors’ capital gains, as reported on tax returns for the U.S. population. Our results indicate that increasing trading hours exacerbates retail investors’ tendencies to trade “too much,” leading to declines in portfolio performance. Our findings inform discussions among academics, practitioners, and regulators about the potential detrimental effects of decreasing barriers to entry for retail investors in trading markets