scholarly journals Retail Investors’ Responsibilities in Stock Market Imperfection in Bangladesh: An Empirical Study

2015 ◽  
Vol 7 (2) ◽  
pp. 78
Author(s):  
Protap Kumar Ghosh ◽  
Sutap Kumar Ghosh
Keyword(s):  
Stock Market ◽  
Price Volatility ◽  
Relevant Information ◽  
Stock Trading ◽  
Market Imperfection ◽  
Market Index ◽  
Retail Investors ◽  
Retail Investor ◽  
Regulatory Bodies ◽  
Price Instability

<p>Because of frequent price instability, stock market in Bangladesh represents itself an imperfect one over times. The retail investors claim that these frequent price fluctuation in the market is due to price manipulation, presence of syndicate and improper control by regulatory bodies and so on. But this study has found that a great portion of retail investors are very micro investors and reluctant in using relevant information in stock trading and furthermore ridiculously influenced by others investors and brokerage house personnel. Most of them consider only trend of past prices and market index. Majority of our respondents never considered net asset per share although it might give an idea about market value per share. So, the whole responsibilities of this price volatility and market imperfection can’t be shifted to third parties solely; retail investor themselves are responsible to some extent due to their irrational behavior and high expectation from stock trading. Stock market perfection in Bangladesh is quite impossible without enhancing awareness among retail investors and ensuring their rational behavior in stock trading.</p>

scholarly journals Awareness Level of Retail Investors on Stock Market in Chennai City

2020 ◽  
Vol 8 (4S5) ◽  
pp. 14-16
Keyword(s):  
Stock Market ◽  
Investment Decisions ◽  
Mean Value ◽  
The Past ◽  
Retail Investors ◽  
Retail Investor ◽  
Stock Market Investors ◽  
Chennai City ◽  
Investment Patterns ◽  
Structured Questionnaire

The globalization of monetary markets has been increasing the dimensions of retail investor community over the past three decades by providing a good sort of market and investment options. Hence, it makes their investment decisions process more complex. The present study aims to study the awareness of investors on stock market. The data were collected from 100 retail stock market investors of Chennai using structured questionnaire. The analysis is made using percentage and mean value. The study proves that post graduate, professional, high income level investors are aware of investment patterns through friends, neighbors and they yield a good income. The study also reveals that the retail investors are even aware of the fundamental and technical analysis of investment, which helps them for a better and wise investment.

Estimation of Price Volatility of Nifty 50 Index using ADF and GARCH (1, 1)

2021 ◽  
pp. 480-485
Keyword(s):  
Stock Market ◽  
Price Volatility ◽  
Research Area ◽  
Stock Market Index ◽  
Economic Sectors ◽  
Stock Market Returns ◽  
Market Index ◽  
Augmented Dickey Fuller ◽  
Portfolio Managers ◽  
Adf Test

Volatility is one of the critical variables to make an appropriate decision in investment. Volatility is a crucial research area in financial markets. So Portfolio managers, company treasurers, and risk arbitrageurs closely observe volatility trends resulting from changes in costs that affect their investment and decisions in risk management. The objective of the study was to examine the volatility of the Nifty 50 index based on the Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model. Daily observations (3125) from March 3, 2008, to March 3, 2020, of stock market returns were used for analysis, and it helped to provide the volatility patterns. Augmented Dickey fuller was used to estimate volatility using the GARCH (1,) model to test stationary. The results of the ADF test revealed that financial data was stationary. The result indicated that the performance of the NIFTY 50 stock market index was highly volatile, leading to an excellent opportunity for long-term investment in any of the 12 economic sectors listed in the NIFTY 50 index.

scholarly journals The impact of transaction costs in portfolio optimization

2019 ◽  
Vol 24 (48) ◽  
pp. 288-311
Author(s):  
Luc Chavalle ◽  
Luis Chavez-Bedoya
Keyword(s):  
Stock Market ◽  
Transaction Costs ◽  
Portfolio Optimization ◽  
Content Type ◽  
Holding Period ◽  
Retail Investors ◽  
Retail Investor ◽  
The Usa ◽  
The Cost ◽  
The Impact

Purpose This paper aims to analyze the impact of transaction costs in portfolio optimization in Peru. The study aims to compare the transaction costs structure applied in Peru with respect to the ones applied in the USA, and over a few dimensions. Design/methodology/approach The paper opted for an empirical study analyzing the cost of rebalancing portfolios over a set period and dimensions. Stocks have been carefully selected using Bloomberg terminals, and portfolio designed then rebalanced using VBA programming. Over a few dimensions as type and number of stocks, holding period and trading strategy, the behavior of these different transaction costs has been compared. The analysis has been done for four different portfolios. Findings The paper provides empirical insights about how a retail investor actively trading in Peru can pay up to 14 times more in transaction costs than trading the same portfolio in the USA. These comparatively high transaction costs prevent retail investors to trade in the Peruvian stock market while fueling illiquidity to this market. Research limitations/implications The paper deals with a limited amount of Peruvian stocks. Researchers are encouraged to test the proposition further, including other dimensions. Practical implications The paper includes implications for any retail investor that wants to invest in Peruvian stocks, giving an insight about how expensive it is to actively rebalance a portfolio in Peru. Originality/value This paper fulfils an identified need to study how much it costs to actively invest on the stock market in Peru.

scholarly journals DO INVESTORS REALLY REGRET?

2019 ◽  
pp. 1-3
Author(s):  
Mrs. A. Sumera ◽  
M. Srinivasa Reddy
Keyword(s):  
Stock Market ◽  
Behavioral Finance ◽  
Portfolio Management ◽  
Natural Process ◽  
Investor Behavior ◽  
Wide Scope ◽  
Adequate Knowledge ◽  
Retail Investors ◽  
Retail Investor ◽  
Portfolio Investments

“There are only a few people who claim to have no regrets in life and finances”. Retail investors are no exception. Investment is a natural process wherein,an individual wants every rupee to earn even more rupees.Eventually,investors get too excited at times about returns and certainly land up in regret zone.Though,behavioral finance has emerged as interdisciplinary, complimentary science to explain stock market phenomenon and regret analysis is one thrust area where much research is sporadic,especially in India.To explore the likelihood of regret and its impact on retail investor behavior in portfolio investments,the present study is conducted.Unfolding the regrets of retail investors while lack of adequate knowledge about portfolio management and peer effect as major reasons for such regrets.However,investors did exhibit regrets in big way as they perceive the stock market to be volatile and risky.Further,there are is wide scope for more studies viz., analysis of variance in regrets among different groups of investors and studies against different demographic factors etc.,

Role of Financial and Non-Financial Information in Shaping Trading Behavior: A Retail Investor’s Perspective

2020 ◽  
Vol 38 (3) ◽  
Author(s):  
Muhammad Naveed ◽  
Muzammal Ilyas Sindhu ◽  
Shoaib Ali
Keyword(s):  
Stock Exchange ◽  
Investment Decision ◽  
Investment Decisions ◽  
Financial Information ◽  
Equation Modeling ◽  
Trading Behavior ◽  
Stock Trading ◽  
Retail Investors ◽  
Retail Investor

This study aims to examine the role of information disclosure in determining retail investor trading behavior. The approach of the study is deductive, while the quantitative strategy is adopted by using a survey questionnaire for data collection. Primary data was collected from 386 retail investors actively involved in stock trading at Pakistan Stock Exchange (PSX). Theoretical underpinning is based on the signaling theory. Covariance based structural equation modeling (SEM) has carried out to statistically examine the strength of the proposed model.The key findings of this study exhibit that on average, retail investors invest in firms with detailed financial and non-financial disclosures. The result also shows the intervening influence of perceived corporate image on retail investor decisions. Categorically, the finding of this study indicates that improved financial and non-financial disclosure practices support retail Investors to make sound stock investment decisions. The proposed model is novel to insight into the retail investor investment decision in the context of Pakistan.The results should be of interest to firms reporting detail and cohesive non-financial information with the presumption that it is requisite to influence the investor's investment decision making. The result reflects the mismatch between retail Investors' preferences and firm's information reporting practices, which in turn affect their appeal toward investment decisions. This study contributes to the comprehension of the information needs of retail investors and how it hailed their trading behavior.  The findings of the study remain robust to firms listed on a stock exchange and retail Investor involved in stock trading.

scholarly journals Moving Average Indicator and Trade Set-up as Correlates to Investment Trading in Stock Market: Basis for e Predictability Primer

2021 ◽  
Vol 3 (2) ◽  
pp. 140-151
Author(s):  
Elizabeth B. Alvior
Keyword(s):  
Stock Market ◽  
Financial Market ◽  
Moving Average ◽  
Proper Understanding ◽  
Retail Investors ◽  
Retail Investor ◽  
Convergence And Divergence ◽  
Set Up ◽  
The Many ◽  
Time Frames

Moving average (MA) is one of the many indicators that retail investors can be used when trading their investment in the stock market or any financial market. The inclusion of moving average to trade set-up serves as the guidelines of the retail investors to properly execute the trades. The trade set-up with moving average includes different time frames, numbers of MA and MA with combination to other indicators. The 21 Day MA, 3 different timeframes of MA, 21 MA, and 50 MA for the crossover, and indicators like MACD are the most preferred by the retail investors to add in the trade set-up. The retail investor agrees that the moving average indicator is useful when entering and exiting the trades, when finding the Support and Resistance (SAR) area, predicting new trends, a combination of moving average crossover, MA in combination with other technical indicators. The quantitative method is used to emphasize how MA indicators help the investment trading of retail investors and the statistical result shows the significant relationship between the number of time periods or frames like 9, 21, 50, 100, and 200 Moving Average in entering and exiting the trades. Part of the results shows how Moving Average Convergence and Divergence (MACD) in combining to MA results in an insignificant relationship when exiting and entering the trades. Another result about MACD or Volume Analysis in combining to MA when predicting new trends shows an insignificant relationship. This means that moving average indicators and the trade setup with a proper understanding of each can combine and deliver a better investment result to retail investors.

Predicting Stock Market Performance

2020 ◽  
pp. 1-10
Author(s):  
Thomas Plieger ◽  
Thomas Grünhage ◽  
Éilish Duke ◽  
Martin Reuter
Keyword(s):  
Stock Market ◽  
Risk Taking ◽  
Life Stress ◽  
Price Volatility ◽  
Individual Characteristics ◽  
Self Report ◽  
Financial Behavior ◽  
Market Simulation ◽  
Stock Market Performance ◽  
Risk Taking Behavior

Abstract. Gender and personality traits influence risk proneness in the context of financial decisions. However, most studies on this topic have relied on either self-report data or on artificial measures of financial risk-taking behavior. Our study aimed to identify relevant trading behaviors and personal characteristics related to trading success. N = 108 Caucasians took part in a three-week stock market simulation paradigm, in which they traded shares of eight fictional companies that differed in issue price, volatility, and outcome. Participants also completed questionnaires measuring personality, risk-taking behavior, and life stress. Our model showed that being male and scoring high on self-directedness led to more risky financial behavior, which in turn positively predicted success in the stock market simulation. The total model explained 39% of the variance in trading success, indicating a role for other factors in influencing trading behavior. Future studies should try to enrich our model to get a more accurate impression of the associations between individual characteristics and financially successful behavior in context of stock trading.

On the sensibility of the Pairs Trading strategy: the case of the FTS stock market index

2020 ◽  
Vol 38 (3) ◽  
Author(s):  
Ainhoa Fernández-Pérez ◽  
María de las Nieves López-García ◽  
José Pedro Ramos Requena
Keyword(s):  
Standard Deviation ◽  
Stock Market ◽  
Trading Strategy ◽  
Stock Market Index ◽  
Pairs Trading ◽  
Empirical Application ◽  
Statistical Arbitrage ◽  
Market Index ◽  
Standard Deviations ◽  
Using Data

In this paper we present a non-conventional statistical arbitrage technique based in varying the number of standard deviations used to carry the trading strategy. We will show how values of 1 and 1,2 in the standard deviation provide better results that the classic strategy of Gatev et al (2006). An empirical application is performance using data of the FST100 index during the period 2010 to June 2019.

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