Does Mood Affect Trading Behavior?

57 Pages Posted: 30 Jun 2011 Last revised: 13 Oct 2015

See all articles by Markku Kaustia

Markku Kaustia

Aalto University School of Business

Elias Henrikki Rantapuska

Aalto University

Date Written: August 5, 2015


The assumption that mood affects investors’ behavior in the field is gaining acceptance due to experimental studies and papers linking stock returns with environmental variables, such as weather and length of day. To identify mood effects this paper utilizes account level stock trading data from all investors in Finland, a country with significant variation in weather and length of day. While some weather-related mood variables and calendar effects are individually significant, little of the day-to-day variation in trading is collectively explained by all such factors. In contrast, we find strong seasonal lower frequency patterns that seem connected to vacations.

Keywords: mood, trading behavior, weather, seasonal affective disorder (SAD), stock market

JEL Classification: D03, G11, G12

Suggested Citation

Kaustia, Markku and Rantapuska, Elias Henrikki, Does Mood Affect Trading Behavior? (August 5, 2015). Journal of Financial Markets, Forthcoming, Available at SSRN: or

Markku Kaustia

Aalto University School of Business ( email )

P.O. Box 1210
Helsinki, 00100
+3589 4313 8475 (Phone)
+3589 4313 8678 (Fax)

Elias Henrikki Rantapuska (Contact Author)

Aalto University ( email )

P.O. Box 21210
Helsinki, 00101

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