Insiders' Profits, Costs of Trading, and Market Efficiency Export

@article{citeulike:3326538, abstract = {An investigation is made of the anomalous findings of the previous insider trading studies that any investor can earn abnormal profits by reading the Official Summary. Using approximately 60,000 insider sale and purchase transactions for the period 1975-1981, an analysis is presented of: 1. the availability of abnormal profits to insiders, 2. the availability of abnormal profits to outsiders who imitate insiders, 3. the determinants of insiders' predictive ability, and 4. the effect of insider trading on costs of trading for other investors. The implications for market efficiency and evaluation of abnormal profits to active trading strategies are considered. The evidence presented suggests that insiders can predict abnormal future stock price changes. It also is found that, as a percentage of stock price, the expected loss to insiders and firm size is negatively correlated.}, author = {Seyhun and Nejat, H.}, citeulike-article-id = {3326538}, journal = {Journal of Financial Economics}, keywords = {analysis, changes, cost, efficient, insider-trading, level, markets, predictions, price, prices, profits, returns, securities, spread, statistical, stock, studies}, month = {June}, number = {2}, pages = {189--213}, posted-at = {2008-09-24 01:30:36}, priority = {2}, title = {Insiders' Profits, Costs of Trading, and Market Efficiency}, volume = {16}, year = {1986} }

TY - JOUR ID - citeulike:3326538 L3 - citeulike-article-id:3326538 N2 - An investigation is made of the anomalous findings of the previous insider trading studies that any investor can earn abnormal profits by reading the Official Summary. Using approximately 60,000 insider sale and purchase transactions for the period 1975-1981, an analysis is presented of: 1. the availability of abnormal profits to insiders, 2. the availability of abnormal profits to outsiders who imitate insiders, 3. the determinants of insiders' predictive ability, and 4. the effect of insider trading on costs of trading for other investors. The implications for market efficiency and evaluation of abnormal profits to active trading strategies are considered. The evidence presented suggests that insiders can predict abnormal future stock price changes. It also is found that, as a percentage of stock price, the expected loss to insiders and firm size is negatively correlated. IS - 2 JF - Journal of Financial Economics EP - 213 TI - Insiders' Profits, Costs of Trading, and Market Efficiency VL - 16 SP - 189 KW - analysis KW - changes KW - cost KW - efficient KW - insider-trading KW - level KW - markets KW - predictions KW - price KW - prices KW - profits KW - returns KW - securities KW - spread KW - statistical KW - stock KW - studies AU - Seyhun AU - Nejat, H PY - 1986/06// ER -