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

Matthew D. Crook (), Andrew A. Lynch () and Brian R. Walkup ()
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Matthew D. Crook: Southeastern Louisiana University
Andrew A. Lynch: University of Arkansas
Brian R. Walkup: Crummer Graduate School of Business at Rollins College

Journal of Economics and Finance, 2024, vol. 48, issue 2, No 13, 544-562

Abstract: 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.

Keywords: COVID-19; Pandemic; Retail trading; Institutional trading; Investor attention (search for similar items in EconPapers)
JEL-codes: G11 G12 G14 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s12197-024-09663-0

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