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We propose an extension to the concept of the disposition effect by allowing the use of alternative reference points. While the traditional definition is based on classifying stocks as winners and losers solely based on the purchase price, we incorporate stock prices closer to sell date into the...
Persistent link: https://www.econbiz.de/10013241646
We use random matching to study the trading behaviors of retail investors who hold passive exchange traded funds invested in stocks (P-ETFs). Using both trading records and survey data to control for all the key investor characteristics, we find strong evidence that retail investors trade...
Persistent link: https://www.econbiz.de/10013244316
', with individuals making investment decisions that are more in line with the advice from portfolio theory …
Persistent link: https://www.econbiz.de/10013492506
Previous studies document a relationship between gambling at the aggregate level and investments in securities with lottery-like features. We combine data on individual gambling consumption with portfolio holdings and trading records to examine whether gambling and trading act as substitutes or...
Persistent link: https://www.econbiz.de/10013547897
We establish a direct link between the idiosyncratic volatility (IVol) puzzle and the behavior of sophisticated and private investors. To do so, we employ three option-based measures of informed trading and attention data from Google Trends. Our analyses show that the IVol puzzle is particularly...
Persistent link: https://www.econbiz.de/10012926316
This working paper is written by Nina Klocke (Paderborn University), Daniel Muller (Paderborn University), Tim Hasso (Bond University) and Matthias Pelster (Paderborn University).This paper studies the impact of social interactions on investors’ trading behaviour and risk-taking. We analyse a...
Persistent link: https://www.econbiz.de/10014235909
The disposition effect is the reluctance to sell assets at a loss relative to a salient point of reference, typically assumed to be the purchase price. Using data on stocks and housing sales, we show that the peak price achieved by an asset during the investor's period of holding constitutes an...
Persistent link: https://www.econbiz.de/10014430688
Using a large panel of U.S. brokerage accounts trades and positions, we show that a large fraction of retail investors trade as contrarians after large earnings surprises, especially for loser stocks, and that such contrarian trading contributes to post earnings announcement drift (PEAD) and...
Persistent link: https://www.econbiz.de/10014369372
We document novel facts on the exit and reentry margins of stock market participation by retail investors using detailed administrative data on every Norwegian resident from 1993 to 2016. Contrary to the conventional view that individuals either never or always participate in the stock market,...
Persistent link: https://www.econbiz.de/10015179601
We explore a unique dataset on individual investors’ online trading accounts to examine the determinants of their attention and its relation to portfolio performance. In particular, we investigate what individual characteristics affect investor attention and what type of information drives...
Persistent link: https://www.econbiz.de/10013247878