We examine how professional stock traders, working for a Nasdaq market maker, are influenced by their recent trading performance. Our results show that, in aggregate, when the traders incur morning losses, their desire to recoup these losses before the close of trading leads them to trade more...

The Handbook of Behavioral Finance is a comprehensive, topical and concise source of cutting-edge research on recent developments in behavioral finance.

Active stock traders, or day traders, who may account for a sizable proportion of US trading volume, hold stocks for only hours or even minutes. Examination of their trading profits reveals that about half of the 1,386 day traders in this study were profitable after paying commissions. Both...

Data on a U.S. proprietary stock-trading team provide evidence of the tendency of traders to hold on to their losers too long and sell their winners too soon - that is, the disposition effect. The group of traders studied earned more than $1.4 million in intraday trading profits, but they...