Momentum Trading by Institutions

Posted: 15 Jul 2003

See all articles by S.G. Badrinath

S.G. Badrinath

San Diego State University; IIM-Bangalore

Sunil Wahal

Arizona State University (ASU) - Finance Department

Multiple version iconThere are 2 versions of this paper

Abstract

We document the equity trading practices of approximately 1,200 institutions from the third quarter of 1987 through the third quarter of 1995. We decompose trading by institutions into the initiation of new positions (entry), the termination of previous positions (exit), and adjustments to ongoing holdings. Institutions act as momentum traders when they enter stocks but as contrarian traders when they exit or make adjustments to ongoing holdings. We find significant differences in trading practices among different types of institutions.

Suggested Citation

Badrinath, Swaminathan G. and Wahal, Sunil, Momentum Trading by Institutions. The Journal of Finance, Vol. 57, pp. 2449-2478, 2002. Available at SSRN: https://ssrn.com/abstract=369708

Swaminathan G. Badrinath

San Diego State University ( email )

5500 Campanile Drive
San Diego, CA 92182-8236
United States
18583543100 (Phone)

IIM-Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India
+918026993361 (Phone)

Sunil Wahal (Contact Author)

Arizona State University (ASU) - Finance Department ( email )

W. P. Carey School of Business
PO Box 873906
Tempe, AZ 85287-3906
United States

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