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Delayed informed trades and opinion divergence: Evidence from earnings releases

Tao Chen ()

International Journal of Finance & Economics, 2022, vol. 27, issue 4, 4556-4574

Abstract: This study begins to verify whether delayed informed trades occur surrounding an earnings release. Next, we discover that post‐event investor opinions tend to diverge when more informed trades are delayed after the earnings release. As additional empirical evidence indicates, investors are likely compelled to postpone their informed trades due to information complexity, stock illiquidity, and institutional competition. Finally, such a documented association between delayed informed trades and opinion divergence remains robust to the placebo test, endogeneity problem, and large‐cap sample bias.

Date: 2022
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International Journal of Finance & Economics is currently edited by Mark P. Taylor, Keith Cuthbertson and Michael P. Dooley

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Handle: RePEc:wly:ijfiec:v:27:y:2022:i:4:p:4556-4574