The Impact of Political Uncertainty and Abnormal Market Conditions on Institutional Trading Behavior

Journal of Trading, Spring 2013, Vol. 8, No. 2: pp. 15-22

Posted: 16 Sep 2014

See all articles by Emre Kuvvet

Emre Kuvvet

Nova Southeastern University

Date Written: 2013

Abstract

This article investigates the impact of political uncertainty and abnormal market conditions on institutional trading behavior. The study finds that institutional investors are net buyers during abnormal market decreases and net sellers during abnormal market increases. Institutional investors’ net buying activity declines because of aversion to political uncertainty. Institutional investors face high price impact during times of high political uncertainty and abnormal market conditions. In abnormal market declines, institutional sells face a 2.98% price impact. In abnormal market increases, institutional buys generate a price impact of 3.24%. This study also finds that high political uncertainty increases price impact during abnormal market declines by up to 0.10%.

Keywords: Political Uncertainty; Abnormal Market Conditions; Institutional Trading; Trading Profit

Suggested Citation

Kuvvet, Emre, The Impact of Political Uncertainty and Abnormal Market Conditions on Institutional Trading Behavior (2013). Journal of Trading, Spring 2013, Vol. 8, No. 2: pp. 15-22, Available at SSRN: https://ssrn.com/abstract=2311012

Emre Kuvvet (Contact Author)

Nova Southeastern University ( email )

Ft. Lauderdale, FL 33314
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
286
PlumX Metrics