Work

The price impacts of informed investors

Year: 2026

Type: article

Abstract: We empirically identify a group of stock-exchange accounts that profit from 11 years of earnings surprises. Their trading behavior is consistent with privately informed trading, yet they have negative and temporary price impacts. We then empirically identify a second group of accounts that have positive and permanent price impacts. The trading behavior of the second group is more consistent with trading on public information, and they trade the wrong way before earnings surprises. The behavior of both account groups contrasts with models that associate permanent price impact with privately informed trading.

Source: Journal of Financial Markets

DOI: 10.1016/j.finmar.2026.101058

Authors: Corey Garriott, Ryan Riordan

Institutions: United States Department of the Treasury, Office of Financial Research, Ludwig-Maximilians-Universität München

Language: English

Topic: Financial Markets and Investment Strategies

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $2,950

OpenAlex ID: W7128907385

FWCI:

Cites: 59

Cited by: 1

Related to: