Are retail investors less aggressive on small price stocks?

Carole Métais and Tristan Roger

Journal of Financial Markets, 2022, vol. 59, issue PA

Abstract: We investigate whether number processing impacts the limit order aggressiveness of retail investors. When posting non-marketable orders, individual investors are less aggressive on small price stocks than on large price stocks. This difference is not explained by differences in liquidity and other usual drivers of order aggressiveness. No such difference exists for limit orders of high-frequency traders. The small price bias is detrimental to retail investors since it increases the costs borne when trading small price stocks.

Keywords: Retail investors; Limit orders; Order aggressiveness; Small price bias; Number perception (search for similar items in EconPapers)
JEL-codes: G10 G41 G50 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1386418121000604
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finmar:v:59:y:2022:i:pa:s1386418121000604

DOI: 10.1016/j.finmar.2021.100685

Access Statistics for this article

Journal of Financial Markets is currently edited by B. Lehmann, D. Seppi and A. Subrahmanyam

More articles in Journal of Financial Markets from Elsevier
Bibliographic data for series maintained by Catherine Liu ().