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Are Mining-Exploration Stocks More Prone to Informed Trading Than Mining-Production Stocks?

Author

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  • Russell Poskitt

    (Department of Accounting and Finance, University of Auckland, Private Bag 92019, Auckland.)

Abstract

This paper examines the level of informed trading in mining-exploration and production stocks listed on the Australian Stock Exchange. The probability of informed trading is higher in exploration stocks. However, this same pattern is detected in a sample of control-stocks matched by trading activity, suggesting that the difference in informed trading between production and exploration stocks reflects the impact of differences in trading activity documented in prior research. These results show that mining-exploration stocks experience the same level of informed trading as other less actively traded stocks in other industries.

Suggested Citation

  • Russell Poskitt, 2005. "Are Mining-Exploration Stocks More Prone to Informed Trading Than Mining-Production Stocks?," Australian Journal of Management, Australian School of Business, vol. 30(2), pages 201-227, December.
    • Handle: RePEc:sae:ausman:v:30:y:2005:i:2:p:201-227
    DOI: 10.1177/031289620503000202
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    References listed on IDEAS

    as
    1. Easley, David & Kiefer, Nicholas M & O'Hara, Maureen, 1996. "Cream-Skimming or Profit-Sharing? The Curious Role of Purchased Order Flow," Journal of Finance, American Finance Association, vol. 51(3), pages 811-833, July.
    2. BrownJr., William O. & Burdekin, Richard C. K., 2000. "Fraud and financial markets: the 1997 collapse of the junior mining stocks," Journal of Economics and Business, Elsevier, vol. 52(3), pages 277-288.
    3. repec:bla:jfinan:v:53:y:1998:i:3:p:1015-1052 is not listed on IDEAS
    4. Heidle, Hans G. & Huang, Roger D., 2002. "Information-Based Trading in Dealer and Auction Markets: An Analysis of Exchange Listings," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 37(3), pages 391-424, September.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Xiaomeng Chen & Sue Wright & Hai Wu, 2018. "Exploration intensity, analysts’ private information development and their forecast performance," Accounting and Business Research, Taylor & Francis Journals, vol. 48(1), pages 77-107, January.
    2. Gordon, Narelle & Watts, Edward & Wu, Qiongbing, 2014. "Information attributes, information asymmetry and industry sector returns," Pacific-Basin Finance Journal, Elsevier, vol. 26(C), pages 156-175.

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    More about this item

    Keywords

    MINING STOCKS; INFORMED TRADING;

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