Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 18, 2022 erstellt
Beschreibung:
The contrarian behavior of individual investors depends on whether a stock is trading at a gain or a loss. We find that this conditional behavior is largely explained by naive take-gain and stop-loss strategies: retail traders tend to sell stocks that experience positive (negative) returns, especially when the stock reaches a new high (low) price for the investor. Consequently, retail investors tend to provide liquidity via contrarian trading for stocks trading in the gain domain while they demand liquidity for stocks trading at a loss. These systematic patterns in individual investor behavior allow for predictions with respect to the cross-section of expected returns, short-term reversals, and return volatility, which we confirm empirically