We hypothesize that cognitive limitation may be manifested in a disproportionately large volume of limit orders submitted at round-number prices if investors use these numbers as cognitive shortcuts. Using detailed limit order data in the Taiwan Futures Exchange, we find that investors with...

We find that individual investors tend to trade in the same direction as other individual investors in the same broker branch. The more pronounced an individual investor's herding behavior, the worse she performs in her investments. One explanation that herding investors underperform is the poor...

Do superstitious traders lose money? We answer this question in the context of trading in the Taiwan Futures Exchange, where we exploit the Chinese superstition that the number “8” is lucky and the number “4” is unlucky. We find that individual investors, but not institutional investors,...