Does Non-Informative Text Affect Investor Behavior?
Forthcoming, Financial Management
47 Pages Posted: 27 Nov 2012 Last revised: 27 Oct 2018
Date Written: April 10, 2018
Abstract
This paper demonstrates that easily processed texts affect investor trading behavior even in the absence of any informational content. We examine the trading symbols of US firms and find that stocks with clever tickers (those that are actual words in the English language) are more liquid, as measured by higher turnover and trading volume, as well as lower spreads. Furthermore, clever ticker stocks are traded more by uninformed investors, and have larger market reactions on earnings announcement days. These results suggest that ticker fluency facilitates trading by improving the firm’s visibility among retail investors through attention-grabbing and memorization.
Keywords: ticker symbols, behavioral biases, fluency, liquidity
JEL Classification: G11, G14
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Giving Content to Investor Sentiment: The Role of Media in the Stock Market
-
More than Words: Quantifying Language to Measure Firms' Fundamentals
By Paul C. Tetlock, Maytal Saar-tsechansky, ...
-
Is All that Talk Just Noise? The Information Content of Internet Stock Message Boards
By Murray Z. Frank and Werner Antweiler
-
Media Coverage and the Cross-Section of Stock Returns
By Lily H. Fang and Joel Peress
-
When is a Liability not a Liability? Textual Analysis, Dictionaries, and 10-Ks
By Tim Loughran and Bill Mcdonald
-
Do Stock Market Investors Understand the Risk Sentiment of Corporate Annual Reports?
By Feng Li
-
Yahoo! For Amazon: Sentiment Parsing from Small Talk on the Web
By Sanjiv Ranjan Das and Mike Y. Chen
-
By Zhi Da, Joseph Engelberg, ...
-
By Joshua D. Coval and Tyler Shumway
-
The Impact of Credibility on the Pricing of Managerial Textual Content
By Elizabeth Demers and Clara Vega