Insider Trades and Demand by Institutional and Individual Investors
There is a strong inverse relation between insider trading and institutional demand the same quarter and over the previous year. Our analysis suggests a combination of factors contribute to this relation. First, institutional investors are more likely to provide the liquidity necessary for insiders to trade. Second, insiders are more likely to buy low valuation and low lag return stocks while institutions are attracted to the opposite security characteristics. Last, the results are consistent with the hypothesis that insiders are more likely to view their securities as overvalued (undervalued) following a period when institutions were net buyers (sellers). The Author 2010. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oxfordjournals.org., Oxford University Press.
Year of publication: |
2010
|
---|---|
Authors: | Sias, Richard W. |
Published in: |
Review of Financial Studies. - Society for Financial Studies - SFS. - Vol. 23.2010, 4, p. 1544-1595
|
Publisher: |
Society for Financial Studies - SFS |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Reconcilable differences : momentum trading by institutions
Sias, Richard W., (2007)
-
Changes in institutional ownership and stock returns : assessment and methodology
Sias, Richard W., (2006)
-
Institutional industry herding
Choi, Nicole, (2009)
- More ...