Date of Award
Summer 8-2023
Document Type
Dissertation
Degree Name
Doctor of Philosophy (PhD)
Department
Finance
Program/Concentration
Business Administration - Finance
Committee Director
Licheng Sun
Committee Member
Mohammad Najand
Committee Member
David Selover
Abstract
Essay 1: Retail investors from the discount broker Robinhood swarm into stocks with pending earnings announcements and stay away from them immediately after the announcements. We study four competing explanations for this phenomenon: liquidity provision, informed trading, lottery preference, and attention-induced herding by noise traders. We find strong evidence that, immediately around earnings announcements, Robinhood investors’ behavior is primarily driven by attention-induced noise trading. Our results offer new insights into retail traders’ motivation for trading when they face heightened uncertainty from earnings announcements. Our study also goes beyond Barber et al.’s (2022) limited focus on the top 0.5% of the sample by presenting a full picture of Robinhood traders’ trading activity.
Essay 2: We provide the first comprehensive study on the relation between national lotteries and retail trading activities in the United States. Due to data limitations, prior studies are constrained to the evidence from local markets such as California, Taiwan, and Germany. With the help of two unique U.S. datasets on retail trading activities, we provide convincing evidence of a substitution effect between retail trading and large jackpots from U.S. national lotteries. Our findings indicate that this substitution effect becomes more pronounced as the jackpot size increases.
Rights
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DOI
10.25777/3thd-r327
ISBN
9798380393447
Recommended Citation
Liang, Qiqi.
"Two Essays on Retail Trading"
(2023). Doctor of Philosophy (PhD), Dissertation, Finance, Old Dominion University, DOI: 10.25777/3thd-r327
https://digitalcommons.odu.edu/businessadministration_etds/152