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Delayed informed trades and opinion divergence: Evidence from earnings releases

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  • Tao Chen

Abstract

This study begins to verify whether delayed informed trades occur surrounding an earnings release. Next, we discover that post‐event investor opinions tend to diverge when more informed trades are delayed after the earnings release. As additional empirical evidence indicates, investors are likely compelled to postpone their informed trades due to information complexity, stock illiquidity, and institutional competition. Finally, such a documented association between delayed informed trades and opinion divergence remains robust to the placebo test, endogeneity problem, and large‐cap sample bias.

Suggested Citation

  • Tao Chen, 2022. "Delayed informed trades and opinion divergence: Evidence from earnings releases," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(4), pages 4556-4574, October.
    • Handle: RePEc:wly:ijfiec:v:27:y:2022:i:4:p:4556-4574
    DOI: 10.1002/ijfe.2387
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    Cited by:

    1. Tao Chen & Andreas Karathanasopoulos, 2022. "Do Heterogeneous Beliefs Matter to Post‐announcement Informed Trading?," Abacus, Accounting Foundation, University of Sydney, vol. 58(4), pages 714-741, December.
    2. Chu-Lan Michael Kao & Emily Lin, 2023. "A new PIN model with application of the change-point detection method," Review of Quantitative Finance and Accounting, Springer, vol. 61(4), pages 1513-1528, November.

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