Change in Emotional State of Stock Traders Before and After Booking Loss
9 Pages Posted: 11 Aug 2013
Date Written: August 9, 2013
India has one of the biggest capital markets in Emerging Countries. It has a large number of listed companies, brokers, financial institutions. There is also increasing stock trading community. Most of the retail players now follow Fundamental and Technical Analysis for their stock selection and trading. Stock traders take and close positions far more frequently with increasing risk and money management tools. As these traders are professionals, profits and losses are part of their daily activities. We decided to investigate whether there is emotional impact of booking a loss on these professional shock dealers. We selected total 30 stock traders, mix of 28 male and 2 female stock traders, trading stocks on daily basis. Each trader is at least 18 years old and their interest of trading is mainly in Equities including equity derivatives like Futures, Call and Put Options. Stock traders belong to Vapi, Valsad, Vadodara and Ahmedabad. Study found that there is no significant effect on emotional state change when stock traders books loss on his loss making position.
Keywords: Behavioural Finance, Psychology
JEL Classification: D30, G10, G24, I12, J20, K00, L20, M20, N25, O16, P12
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