Volatility in returns from trading

Heaney, R, Foster, F, Gregor, S, O'Neill, T and Wood, R 2007, 'Volatility in returns from trading', Journal of Behavioral Finance, vol. 8, no. 1, pp. 35-42.

Document type: Journal Article
Collection: Journal Articles

Title Volatility in returns from trading
Author(s) Heaney, R
Foster, F
Gregor, S
O'Neill, T
Wood, R
Year 2007
Journal name Journal of Behavioral Finance
Volume number 8
Issue number 1
Start page 35
End page 42
Total pages 7
Publisher Lawrence Erlbaum Associates
Abstract Odean [1999] observes that naive investors tend to trade too often, but we know little about what motivates them and why their performance is often so poor. This paper describes an experiment where naive traders take part in a share market game with limited information, unlimited credit, and unlimited short-selling. We find that trading profit volatility is positively correlated with the level of understanding of the market, the level of self-efficacy or self-confidence, and the level of trading. Large profits and losses tend to be earned by individuals who trade heavily and have a reasonable understanding of how the market works and how shares are valued. There is also some evidence that a high level of self-efficacy is positively correlated with trading profit volatility.
Subject Financial Economics
DOI - identifier 10.1080/15427560701296787
Copyright notice Copyright © 2007 by The Institute of Behavioral Finance
ISSN 1542-7560
Version Filter Type
Altmetric details:
Access Statistics: 301 Abstract Views  -  Detailed Statistics
Created: Fri, 18 Dec 2009, 10:06:34 EST by Catalyst Administrator
© 2014 RMIT Research Repository • Powered by Fez SoftwareContact us