Investing Research Articles

Does technology amplify adverse herding among inexperienced investors? In their October 2020 paper entitled “Attention Induced Trading and Returns: Evidence from Robinhood Users”, Brad Barber, Xing Huang, Terrance Odean and Christopher Schwarz test the relationship between episodes of intense stock buying by retail (Robinhood) investors and future returns. Their source for buying intensity is the… Keep Reading

How has the market environment changed with the introduction of zero-commission trading and associated interest in trading among many inexperienced users? In their January 2021 paper entitled “Zero-Commission Individual Investors, High Frequency Traders, and Stock Market Quality”, Gregory Eaton, Clifton Green, Brian Roseman and Yanbin Wu examine market implications of growth in trading by a… Keep Reading

How can the retail trader tail wag the market dog? In their February 2021 paper entitled “The Equity Market Implications of the Retail Investment Boom”, Philippe van der Beck and Coralie Jaunin quantify impacts of the Robinhood-catalyzed retail trading boom on the U.S. stock market. They focus on the early part of the COVID-19 pandemic,… Keep Reading

Do brokers who accept payments for order flow (PFOF) pass this income through to customers in the form of cheaper trade execution? In his June 2022 paper entitled “Price Improvement and Payment for Order Flow: Evidence from A Randomized Controlled Trial”, Bradford Lynch compares execution quality for trading randomly selected U.S. common stocks with at… Keep Reading

How consequential are trading frictions for equity options, and how do these frictions vary across brokers? In their September 2024 paper entitled “Some Anonymous Options Trades Are More Equal than Others”, Xing Huang, Philippe Jorion and Christopher Schwarz compare retail option trade executions by placing the same orders across six brokers: E*Trade, Fidelity, Robinhood, Schwab,… Keep Reading

How do mutual funds and hedge funds change their stock holdings in response to a sharp market crash? In their July 2020 paper entitled “Where Do Institutional Investors Seek Shelter when Disaster Strikes? Evidence from COVID-19”, Simon Glossner, Pedro Matos, Stefano Ramelli and Alexander Wagner analyze changes in institutional and retail stock holdings during the… Keep Reading

Below is a weekly summary of our research findings for 11/9/20 through 11/13/20. These summaries give you a quick snapshot of our content the past week so that you can quickly decide what’s relevant to your investing needs. Subscribers: To receive these weekly digests via email, click here to sign up for our mailing list.

How has the marketplace for exchange-traded funds (ETFs) evolved? What performances do its “species” deliver? In their January 2021 paper entitled “Competition for Attention in the ETF Space”, Itzhak Ben-David, Francesco Franzoni, Byungwook Kim and Rabih Moussawi summarize evolution of broad-based ETFs (tracking broad market and style indexes) and specialized ETFs (tracking sectors and narrow… Keep Reading

Below is a weekly summary of our research findings for 3/8/21 through 3/12/21. These summaries give you a quick snapshot of our content the past week so that you can quickly decide what’s relevant to your investing needs. Subscribers: To receive these weekly digests via email, click here to sign up for our mailing list.