Do individual traders undermine firm valuation?

Choi, Paul Moon Sub; Choi, Joung Hwa; Chung, Chune Young

doi:10.1016/j.frl.2020.101567

Cited by 5 publications

(4 citation statements)

References 45 publications

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“…This pattern resulted in a significant wealth transfer to individual investors from other market participants (foreign and domestic institutional investors). Such evidence of sophistication sharply contrasts with the conventional wisdom of treating individual investors as noise traders in the literature (see, for example Barber and Odean, 2009 , Choi and Choi, 2020 ).…”

Section: Introductionmentioning

confidence: 60%

“…While part of the literature tends to characterize individual investors as noise traders vulnerable to psychological biases (e.g., Barber and Odean, 2009 , Choi and Choi, 2020 ), a comprehensive literature on investor types’ trading provides rich granularity on individual investors’ trading behavior and performance. These studies can be located with respect to two polar categories based on the data employed: ( i ) Micro studies using data on each trade (e.g., Griffin J. Harris and Topaloğlu, 2003 ): usually such data are available for a limited portion of the market (e.g., one brokerage house) and/or for a short sample period.…”

Section: Introductionmentioning

confidence: 99%

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Individual investors’ trading behavior in Moscow Exchange and the COVID-19 crisis

Djalilov

Ülkü

2021

Journal of Behavioral and Experimental Finance

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This article presents the first study of Russian individual investors’ aggregate equity trading behavior using novel data from Moscow Exchange, with a focus on the COVID-19 episode. Aggregate Russian individual bought the dip during the COVID crash in March–April 2020. While this can be accounted for by their regular contrarian trading traits, they remained as net buyers until the market fully recovered, a sign of sophistication in striking contrast to views that characterized individual investors as noise traders. Our analysis suggests that this outcome was driven by a combination of regular contrarian traits and a unique positive shock to individual investor demand for equities, with weaker evidence of exploiting a negative bubble.

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Section: Introductionmentioning

confidence: 60%

Section: Introductionmentioning

confidence: 99%

Individual investors’ trading behavior in Moscow Exchange and the COVID-19 crisis

Djalilov

Ülkü

2021

Journal of Behavioral and Experimental Finance

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“…focused on the uninformed retail trade method of noise trading. Additionally, the study revealed a positive association between noise trading and ad-based information trading Choi et al (2020). emphasised the fact that individuals tend to make uninformed decisions.…”

mentioning

confidence: 82%

“…Additionally, the study revealed a positive association between noise trading and ad-based information trading. Choi et al (2020) emphasised the fact that individuals tend to make uninformed decisions. Further, the unchangeable risk has been created by noise traders.…”

Section: Content Analysismentioning

confidence: 99%

A systematic literature review and bibliometric analysis of noise trading

Gupta

Walia

Singh

et al. 2022

QRFM

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Purpose This comprehensive study aims to take a punctilious approach intended to present qualitative and quantitative knowledge on the emerging concept of noise trading and identify the emerging themes associated with noise trading. Design/methodology/approach This study combines bibliometric and content analysis to review 350 publications from top-ranked journals published from 1986 to 2020. Findings The bibliometric and content analysis identified three major themes: the impact of noise traders on the functioning of the stock market, traits of noise traders and different proxies used to measure the impact of noise trading. Research limitations/implications This study undertakes research papers related to the field of finance, published in peer-reviewed journals and that too in the English language. Practical implications This study shall accommodate rational traders, portfolio consultants and other investors to gain deeper insights into the functioning of noise traders. This will further help them to formulate their trading/investment strategies accordingly. Originality/value The successful combination of the bibliometric and content analysis revealed major gaps in the literature and provided future research directions.

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Informed or Biased? Some Evidence from Listed Fund Trading

Choi

2021

Fintech With Artificial Intelligence, Big Data, and Blockchain

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Do individual traders undermine firm valuation?

Cited by 5 publications

References 45 publications

Individual investors’ trading behavior in Moscow Exchange and the COVID-19 crisis

Individual investors’ trading behavior in Moscow Exchange and the COVID-19 crisis

A systematic literature review and bibliometric analysis of noise trading

Informed or Biased? Some Evidence from Listed Fund Trading

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