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Article: Do Superstitious Traders Lose Money?

TitleDo Superstitious Traders Lose Money?
Authors
Issue Date2017
PublisherINFORMS. The Journal's web site is located at http://mansci.pubs.informs.org
Citation
Management Science, 2017, v. 64 n. 8, p. 3469-3970 How to Cite?
AbstractDo 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 Identifierhttp://hdl.handle.net/10722/245362
ISSN
2017 Impact Factor: 3.544
2015 SCImago Journal Rankings: 4.384

 

DC FieldValueLanguage
dc.contributor.authorBhattacharya, U-
dc.contributor.authorKuo, W-
dc.contributor.authorLin, T-
dc.contributor.authorZhao, J-
dc.date.accessioned2017-09-18T02:09:18Z-
dc.date.available2017-09-18T02:09:18Z-
dc.date.issued2017-
dc.identifier.citationManagement Science, 2017, v. 64 n. 8, p. 3469-3970-
dc.identifier.issn0025-1909-
dc.identifier.urihttp://hdl.handle.net/10722/245362-
dc.description.abstractDo 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.languageeng-
dc.publisherINFORMS. The Journal's web site is located at http://mansci.pubs.informs.org-
dc.relation.ispartofManagement Science-
dc.titleDo Superstitious Traders Lose Money?-
dc.typeArticle-
dc.identifier.emailLin, T: chunlin@hku.hk-
dc.identifier.authorityLin, T=rp01077-
dc.description.naturepostprint-
dc.identifier.doi10.1287/mnsc.2016.2701-
dc.identifier.hkuros274165-
dc.identifier.hkuros295618-
dc.identifier.volume64-
dc.identifier.issue8-
dc.identifier.spage3469-
dc.identifier.epage3970-
dc.publisher.placeUnited States-

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