Momentum trading by institutions

S. G. Badrinath, Sunil Wahal

Research output: Contribution to journalArticle

125 Scopus citations

Abstract

We document the equity trading practices of approximately 1,200 institutions from the third quarter of 1987 through the third quarter of 1995. We decompose trading by institutions into the initiation of new positions (entry), the termination of previous positions (exit), and adjustments to ongoing holdings. Institutions act as momentum traders when they enter stocks but as contrarian traders when they exit or make adjustments to ongoing holdings. We find significant differences in trading practices among different types of institutions.

Original languageEnglish (US)
Pages (from-to)2449-2478
Number of pages30
JournalJournal of Finance
Volume57
Issue number6
DOIs
StatePublished - Dec 2002
Externally publishedYes

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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