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- Publisher Website: 10.1287/mnsc.2016.2701
- Scopus: eid_2-s2.0-85051380588
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Article: Do Superstitious Traders Lose Money?
Title | Do Superstitious Traders Lose Money? |
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Authors | |
Keywords | Individual investors Investment performance Limit order clustering Superstition |
Issue Date | 2018 |
Publisher | INFORMS. The Journal's web site is located at http://mansci.pubs.informs.org |
Citation | Management Science, 2018, v. 64 n. 8, p. 3469-3970 How to Cite? |
Abstract | Do superstitious traders lose money? We answer this question in the context of trading in the Taiwan Futures Exchange, where we exploit the Chinese superstition that the number 8 is lucky and the number 4 is unlucky. We find that individual investors, but not institutional investors, submit disproportionately more limit orders at 8 than at 4. This imbalance, defined as the “superstition index” for each investor, is positively correlated with trading losses. Superstitious investors lose money mainly because of their bad market timing and stale orders. Nevertheless, the reliance on number superstition for limit order submissions does decrease with trading experience. |
Persistent Identifier | http://hdl.handle.net/10722/245362 |
ISSN | 2023 Impact Factor: 4.6 2023 SCImago Journal Rankings: 5.438 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Bhattacharya, U | - |
dc.contributor.author | Kuo, W | - |
dc.contributor.author | Lin, T | - |
dc.contributor.author | Zhao, J | - |
dc.date.accessioned | 2017-09-18T02:09:18Z | - |
dc.date.available | 2017-09-18T02:09:18Z | - |
dc.date.issued | 2018 | - |
dc.identifier.citation | Management Science, 2018, v. 64 n. 8, p. 3469-3970 | - |
dc.identifier.issn | 0025-1909 | - |
dc.identifier.uri | http://hdl.handle.net/10722/245362 | - |
dc.description.abstract | Do superstitious traders lose money? We answer this question in the context of trading in the Taiwan Futures Exchange, where we exploit the Chinese superstition that the number 8 is lucky and the number 4 is unlucky. We find that individual investors, but not institutional investors, submit disproportionately more limit orders at 8 than at 4. This imbalance, defined as the “superstition index” for each investor, is positively correlated with trading losses. Superstitious investors lose money mainly because of their bad market timing and stale orders. Nevertheless, the reliance on number superstition for limit order submissions does decrease with trading experience. | - |
dc.language | eng | - |
dc.publisher | INFORMS. The Journal's web site is located at http://mansci.pubs.informs.org | - |
dc.relation.ispartof | Management Science | - |
dc.rights | Copyright © 2017, INFORMS. | - |
dc.subject | Individual investors | - |
dc.subject | Investment performance | - |
dc.subject | Limit order clustering | - |
dc.subject | Superstition | - |
dc.title | Do Superstitious Traders Lose Money? | - |
dc.type | Article | - |
dc.identifier.email | Lin, T: chunlin@hku.hk | - |
dc.identifier.authority | Lin, T=rp01077 | - |
dc.description.nature | postprint | - |
dc.identifier.doi | 10.1287/mnsc.2016.2701 | - |
dc.identifier.scopus | eid_2-s2.0-85051380588 | - |
dc.identifier.hkuros | 274165 | - |
dc.identifier.hkuros | 295618 | - |
dc.identifier.volume | 64 | - |
dc.identifier.issue | 8 | - |
dc.identifier.spage | 3469 | - |
dc.identifier.epage | 3970 | - |
dc.identifier.isi | WOS:000440922200017 | - |
dc.publisher.place | United States | - |
dc.identifier.issnl | 0025-1909 | - |