Examining high-frequency patterns in Robinhood users’ trading behavior

David Ardia, Clément Aymard and Tolga Cenesizoglu

International Review of Financial Analysis, 2025, vol. 105, issue C

Abstract: Using intraday (hourly) and overnight changes in the number of Robinhood (RH) investors holding a stock, we examine their high-frequency trading behaviors in response to contemporaneous and lagged returns. RH investors do not react to contemporaneous returns. However, they respond to lagged intraday or overnight returns, exhibiting three high-frequency behaviors: (i) the number of RH investors increases more for stocks with extreme lagged returns than for those with moderate returns, suggesting attention-driven buying; (ii) this reaction is asymmetric, with larger increases in the number of RH users following extreme negative returns compared to extreme positive returns, suggesting that their contrarian buying is stronger than their momentum buying; (iii) this asymmetry is strongest immediately after extreme returns and dissipates over time. Compared to findings from daily data, our analysis shows that daily data underestimates this asymmetry. Further analyses reveal greater attention to overnight movements, exacerbated behaviors during COVID-19, and variation across firm sizes, with more contrarian buying for larger-cap firms.

Keywords: Attention-induced trading; Robinhood; Retail investors; High-frequency data; Reaction speed; FinTech (search for similar items in EconPapers)
JEL-codes: G11 G14 G40 G41 G53 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:105:y:2025:i:c:s1057521925004569

DOI: 10.1016/j.irfa.2025.104369

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