Informed Trader Competition

54 Pages Posted: 18 Feb 2021

See all articles by Ryan Riordan

Ryan Riordan

Queen's University - Smith School of Business

Corey Garriott

TMX Group

Date Written: February 4, 2021


We identify a group of informed investor that buys before positive earnings announcements and sells before negative announcements. During eleven years of a sample from equity markets, these informed investors trade in competition with one another and profit from their trading. Theory predicts how these investors should impact markets and trade and we find support for some predictions, particularly when the signals of informed traders are correlated. However, we find that more competition between informed investors does not lead to more of their information entering into prices.

Keywords: Strategic trading, informed trading, competition, signal correlation

JEL Classification: G20, G14, L10

Suggested Citation

Riordan, Ryan and Garriott, Corey, Informed Trader Competition (February 4, 2021). Available at SSRN: or

Ryan Riordan (Contact Author)

Queen's University - Smith School of Business ( email )

Smith School of Business, Queen's University
143 Union Street
Kingston, Ontario K7L 3N6

Corey Garriott

TMX Group ( email )

130 King St W
Toronto, Ontario M5X 2A2

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