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Lucky lots and unlucky investors

Author

Listed:
  • Tao Chen

    (University of Macau)

  • Andreas Karathanasopoulos

    (University of Dubai)

  • Stanley Iat-Meng Ko

    (University of Macau)

  • Chia Chun Lo

    (Prince Mohammad Bin Salman College (MBSC))

Abstract

The number 8 is considered lucky under the Chinese culture. This paper tries to examine whether investors hold such superstitious belief in the Hong Kong Stock Exchange. Using the transaction level data, we first show that more intense net buying occurs at 8-ending lots. Next, we seek favorable evidence in support of financial complexity hypothesis and informed trading hypothesis, both of which are effective in expounding the prevalence of this biased trading behavior. Finally, we find that traders’ learning by means of information acquisition is able to alleviate the lucky-8 effect on superstitious traders.

Suggested Citation

  • Tao Chen & Andreas Karathanasopoulos & Stanley Iat-Meng Ko & Chia Chun Lo, 2020. "Lucky lots and unlucky investors," Review of Quantitative Finance and Accounting, Springer, vol. 54(2), pages 735-751, February.
    • Handle: RePEc:kap:rqfnac:v:54:y:2020:i:2:d:10.1007_s11156-019-00805-8
    DOI: 10.1007/s11156-019-00805-8
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    References listed on IDEAS

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    2. Cheng, Feiyang & Chiao, Chaoshin & Wang, Chunfeng & Fang, Zhenming & Yao, Shouyu, 2021. "Does retail investor attention improve stock liquidity? A dynamic perspective," Economic Modelling, Elsevier, vol. 94(C), pages 170-183.

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    More about this item

    Keywords

    Lot sizes; Lucky numbers; Trading biases; Learning effects;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G40 - Financial Economics - - Behavioral Finance - - - General

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