Do transactions on social trading platforms predict the stock market behavior of the aggregate private sector?

Matthias Horn, Julian Schneider and Andreas Oehler

Finance Research Letters, 2024, vol. 66, issue C

Abstract: We analyze the relation between virtual stock holding changes on a social trading platform and stock holding changes of all private investors in a national economy. Our data sources are the social trading platform wikifolio.com and the Securities Holdings Statistics-Base plus (SHS-base) of the German central bank. We find that the transactions of signal providers on wikifolio.com are a good proxy for aggregate transactions of private investors – mirrored by the SHS-base – during the same month, and a good predictor for the aggregate transactions of the private investors in the following month.

Keywords: Social trading; Herding; Fintech; Attention-induced trading; Retail Investor Behavior (search for similar items in EconPapers)
JEL-codes: G11 G14 G23 G40 G41 G50 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:66:y:2024:i:c:s1544612324006986

DOI: 10.1016/j.frl.2024.105668

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