Abstract

http://ssrn.com/abstract=990901
 
 

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Are the Insider Trades of a Large Institutional Investor Informed?


Joseph H. Golec


University of Connecticut - Department of Finance


Financial Review, Vol. 42, No. 2, pp. 161-190, May 2007

Abstract:     
We use a unique data set to consider whether a large institution's (Fidelity funds) insider trades are informed. Theoretical studies of large informed traders suggest that their information advantage could be greater for buy trades than sell trades, be short- or long-lived, and be exploited by varying the pace of trade execution. Although there is evidence of each of these, Fidelity seems to be informed only for quickly executed buy trades. Other trades outperform a stock market index but not a four-factor return model. This performance profile is consistent with Fidelity's fees, which depend on performance compared to an index.

Number of Pages in PDF File: 30

Accepted Paper Series


Date posted: June 4, 2007  

Suggested Citation

Golec, Joseph H., Are the Insider Trades of a Large Institutional Investor Informed?. Financial Review, Vol. 42, No. 2, pp. 161-190, May 2007. Available at SSRN: http://ssrn.com/abstract=990901 or http://dx.doi.org/10.1111/j.1540-6288.2007.00166.x

Contact Information

Joseph Golec (Contact Author)
University of Connecticut - Department of Finance ( email )
School of Business
2100 Hillside Road
Storrs, CT 06269
United States
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References:  40
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