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Retail and institutional trading during a COVID-19 presidential press conference

Author

Listed:
  • Matthew D. Crook

    (Southeastern Louisiana University)

  • Andrew A. Lynch

    (University of Arkansas)

  • Brian R. Walkup

    (Crummer Graduate School of Business at Rollins College)

Abstract

The COVID-19 pandemic substantially impacted many aspects of regular life including financial markets. The increased media attention and slowdown associated with the pandemic provide the opportunity to explore how both institutional and retail traders react to an attention-grabbing event. We examine how the market responded to a unique presidential press conference including CEOs of eight publicly-listed U.S. companies addressing the U.S.’s response to the pandemic. Using the press conference on March 13, 2020, we examine the effect on the trading volatility and returns for each of the eight companies represented. We find positive abnormal returns for the companies participating in the press conference. Using the Robintrack data aggregated from the Robinhood retail trading platform and intraday TAQ data, we see that both retail and institutional trading volume increased on the press conference day. However, the increase in retail trading approximately doubled the increase in institutional trading. For the two companies with the lowest Robinhood user ownership prior to the press conference, ownership more than doubled within an hour of the press conference. Panel VAR analysis including control firms shows the press conference resulted in significant intraday returns, volume, and buy-order imbalances in participating firms’ stock.

Suggested Citation

  • Matthew D. Crook & Andrew A. Lynch & Brian R. Walkup, 2024. "Retail and institutional trading during a COVID-19 presidential press conference," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 48(2), pages 544-562, June.
  • Handle: RePEc:spr:jecfin:v:48:y:2024:i:2:d:10.1007_s12197-024-09663-0
    DOI: 10.1007/s12197-024-09663-0
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    References listed on IDEAS

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    More about this item

    Keywords

    COVID-19; Pandemic; Retail trading; Institutional trading; Investor attention;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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