Are insider trades informative?

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We examine insider trading activities of all companies traded on the NYSE, AMEX, and Nasdaq during the 1975-1995 period. In general, very little market movement is observed when insiders trade and when they report their trades to the SEC. Insiders in aggregate are contrarian investors. However, they predict market movements better than simple contrarian strategies. Insiders also seem to be able to predict cross-sectional stock returns. The result, however, is driven by insider's ability to predict returns in smaller firms. In addition, informativeness of insiders' activities is coming from purchases, while insider selling appears to have no predictive ability.
Publisher
OXFORD UNIV PRESS INC
Issue Date
2001-03
Language
English
Article Type
Article
Citation

REVIEW OF FINANCIAL STUDIES, v.14, no.1, pp.79 - 111

ISSN
0893-9454
DOI
10.1093/rfs/14.1.79
URI
http://hdl.handle.net/10203/79489
Appears in Collection
MT-Journal Papers(저널논문)
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