Abstract
Using a unique data set, we find that large individual investors are successful at picking stocks. Large individual investors' correlated trades can not only move synchronous stock prices but also positively predict future returns. More importantly, they tend to trade before major earnings announcements and large price changes. By contrast, small retail investors' correlated trades are inversely associated with synchronous and future stock returns, indicating that small retails are uninformed. The differential information content between large individuals and small retails highlights the need to classify individual investors according to their investment amount when examining their role in stock pricing.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
