The Profitability of Active Stock Traders

8 Pages Posted: 14 Jun 2006

See all articles by Ryan Garvey

Ryan Garvey

University College Dublin - Department of Economics

Anthony Murphy

University of Oxford - Nuffield College of Medicine

Abstract

Active stock traders, or day traders, who may account for a sizable proportion of US trading volume, hold stocks for only hours or even minutes. Examination of their trading profits reveals that about half of the 1,386 day traders in this study were profitable after paying commissions. Both profitable and unprofitable traders have very similar trading characteristics; they concentrate their trading at much the same time, on the same stocks, and in the same trading locations. Yet the skilled or lucky traders generate $9.5 million in net intraday profits, and the unskilled or unlucky lost $4.6 million in the same three-month sample period.

JEL Classification: G10, G19

Suggested Citation

Garvey, Ryan and Murphy, Anthony, The Profitability of Active Stock Traders. Journal of Applied Finance , Vol. 15, No. 2, Fall/Winter 2005. Available at SSRN: https://ssrn.com/abstract=908615

Ryan Garvey (Contact Author)

University College Dublin - Department of Economics ( email )

Dublin 4, 4
Ireland

Anthony Murphy

University of Oxford - Nuffield College of Medicine ( email )

New Road
Oxford, OX1 1NF
United Kingdom

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