Interesting Harvard Study on Trading Volumes and News Cycles
By - Dan Raju, CEO at Tradier on Jun 22, 2021 at 8:25:24 AM ∙ Comments

Link to the Harvard Study

Had a blast reading this. This study may be much sweeter for a few of my friends who are hungry Data Ninjas but certainly carries some fascinating timely facts. For those who may NOT want to dedicate your weekend to this, let me give you my quick take.

I thought that this study was fascinating as it seems to explain some of the recent Meme Trading behaviors. The paper analyzes clicks on 3.5 million financial news articles tagged with U.S. securities over the course of 12 months. It finds that, not only is trading volume directly related to informational and content releases but, also what is fascinating is that the model under which such information is dispersed or consumed has a substantial impact too. Incremental or Gradual informational dispersion and subsequent small byte consumption( I call it Tik-Tok-like) create enhanced engagement and subsequent trading behavior changes. It also finds that disagreement induced by differential timing of news consumption is strongly predictive of the trading volume.

I really think that WhatsApp groups, Reddit communities, and large day online trading forums result in an environment that creates incremental informational dispersion.

- Dan Raju | CEO  



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