Article Details

Inter Relationship Between High Returns, Over Confidence and Trading Volume |

Vijay Agrawal, in Journal of Advances and Scholarly Researches in Allied Education | Multidisciplinary Academic Research


It has been a challenge for financialeconomists to explain some stylized facts observed in securities markets, amongthem, high levels of trading volume. The most prominent explanation of excessvolume is  overconfidence. High marketreturns make investors overconfident and as a consequence,  these investors  trade   more subsequently  and  make  some transactions  more aggressively.The aim of our paper is to study the impact of the phenomenon of overconfidenceon the trading volume and its role in the formation of the excess volume on thestock market.