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ARTÍCULO
TITULO

Overreaction in TradingEvidence from the intraday trading of SPDRs during the 2008 Financial Crisis

Justin Morscheck    

Resumen

Using intraday trading data during the 2008 financial crisis, from the Standard and Poor?s Depository Receipt (SPDR) market, we test for evidence of the informational advantage of traders. In addition, we examine the effect of pricing error on trade price. If traders are rational, and have accurate information, they will only purchase an asset at a premium (discount) if they have reason to believe that the fundamental value of that asset will increase (decrease). Our results show that the trading price of the SPDR does not significantly predict the movement of underlying asset values. This finding is consistent with traders overreacting to disparities between price and underlying value during the financial crisis.

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