[enter Abstract Body]Long-short hedge funds are often very highly levered, despite the costs of leverage that became apparent during the LTCM crisis in 1998 and the more recent episode in 2008. This note explores potential market imperfections that may explain the use of leverage

This paper investigates the dynamic relation between net individual investor trading and short-horizon returns for a large cross-section of NYSE stocks. The evidence indicates that individuals tend to buy stocks following declines in the previous month and sell following price increases. We...