Day Traders and the Disposition Effect

The disposition effect refers to the tendency to hold losing investments and sell profitable ones. We examine day trader transactions for evidence of a disposition effect. We find that approximately 65% of sample traders hold losing trades longer than profitable ones, providing evidence that sample...

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Bibliographic Details
Published in:The journal of behavioral finance 2004-12, Vol.5 (4), p.192-200
Main Authors: Jordan, Douglas, Diltz, J. David
Format: Article
Language:English
Subjects:
Behavior
Hypotheses
Investors
Online securities trading
Studies
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Summary:The disposition effect refers to the tendency to hold losing investments and sell profitable ones. We examine day trader transactions for evidence of a disposition effect. We find that approximately 65% of sample traders hold losing trades longer than profitable ones, providing evidence that sample day traders display the disposition effect.
ISSN:1542-7560
1542-7579
DOI:10.1207/s15427579jpfm0504_2