The performance of amateur traders on a public internet site: a case of a stock-exchange contest
Bernard, Philippe; Blanchard, Michel (2013), The performance of amateur traders on a public internet site: a case of a stock-exchange contest, Economics Bulletin, 33, 3, p. 1729-1737
TypeArticle accepté pour publication ou publié
External document linkhttp://econpapers.repec.org/RePEc:ebl:ecbull:eb-13-00229
Journal nameEconomics Bulletin
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Abstract (EN)This paper studies a very thorough e-trading data base, including all of the bid/ask orders and daily portfolio values of more than 600 on-line amateur traders in the Paris Stock market focusing on the stormy period covering 2007-2009. Traders also participate in a monthly contest and can win significant prizes. Our first result emphasizes the huge average losses of amateur traders. On average, portfolio values fall from an initial value of 100 to a terminal value of 7 in the 29 months covered here. Our final value is 28 including rewards. The second result is more surprising. Despite our splitting context, smart traders don't clearly emerge. There is clearly no performance persistence, neither for winners nor for loser. With a very few exceptions, winners seem to be just lucky not skilled.
Subjects / KeywordsAmateur traders; behavioral finance; internet trading; persistence
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