Abstract

http://ssrn.com/abstract=2128127
 
 

References (1)



 


 



Insider Trading Patterns


Lee Biggerstaff


Miami University of Ohio - Department of Finance

David C. Cicero


University of Alabama - Culverhouse College of Commerce & Business Administration

M. Babajide Wintoki


University of Kansas - School of Business

October 20, 2015


Abstract:     
We find that corporate insiders trade over longer periods of time when they may have a longer-lived informational advantage. Controlling for the duration of insiders' trading strategies, both their sales and purchases predict sizable abnormal returns on average. We discuss how failure to account for these trading patterns has previously masked the returns to insider trading, and show how accounting for them helps sharpen screens for corporate insiders who trade on information. We also provide evidence that insiders attempt to preserve their informational advantage to maximize trading profits by disclosing their trades after the market has closed. When insiders report their trades after business hours they are more likely to engage in extended sequences of trades, they trade more shares overall, and their trades predict larger abnormal returns.

Number of Pages in PDF File: 49

Keywords: insider trading, informed trading, executive trading, trade patterns

JEL Classification: G12, G14, G18


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Date posted: August 12, 2012 ; Last revised: April 19, 2016

Suggested Citation

Biggerstaff, Lee and Cicero, David C. and Wintoki, M. Babajide, Insider Trading Patterns (October 20, 2015). Available at SSRN: http://ssrn.com/abstract=2128127 or http://dx.doi.org/10.2139/ssrn.2128127

Contact Information

Lee Biggerstaff
Miami University of Ohio - Department of Finance ( email )
Oxford, OH 45056
United States
David C. Cicero
University of Alabama - Culverhouse College of Commerce & Business Administration ( email )
Culverhouse College of Business
Tuscaloosa, AL 35487-0223
United States
Modupe Babajide Wintoki (Contact Author)
University of Kansas - School of Business ( email )
1300 Sunnyside Avenue
Lawrence, KS 66045
United States
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