Can Retail Investors Drive Up Stock Prices?
12 Pages Posted: 17 Oct 2013 Last revised: 23 Dec 2013
Date Written: October 15, 2013
This study finds that return on the NYSE largest-cap portfolio significantly increases following the shock to the percentage change in NYSE odd lot purchase volume. Based on the analysis of monthly data from 1970M2 to 2012M12, the results reveal a causal linkage between return on the NYSE largest-cap portfolio and the percentage change in NYSE odd lot purchase volume. The findings suggest that purchase trades placed by retail investors, on average, help drive up future prices of large-cap stocks.
Keywords: odd lot purchase, retail investor, trading activity, stock market return
JEL Classification: G12, G14
Suggested Citation: Suggested Citation