Abstract
The recent remarkable rise in the number of individual (retail) investors using new electronic trading applications increases the growing demand for research on individual investors’ trading activities. This dissertation consists of two essays focused on the trading activities of individual investors on the Robinhood (electronic trading) apps. The first essay examines individual investors’ trading activities related to scheduled accounting disclosures (i.e., earnings announcements). Findings suggest that individual investors trade significantly both before and after earnings announcements (EA), but this pattern becomes weaker during the COVID-19 pandemic. In addition, I find a significant increase in trading during the after-hours on an earnings announcement (EA) day relative to non-EA day, and that this effect decreases during the COVID-19 pandemic. Furthermore, I find that individual investors show buying behavior after both good news and bad news, indicating attention induced trading, rather than contrarian. During the pandemic, this trend is largely maintained, but the effect becomes weaker.
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