Abstract
Forex social trading is a nascent financial innovation that endows investors with opportunities to speculate on global currencies online by following and emulating investment strategies from savvy traders. Although social trading has been touted as a means of lowering distance barriers and facilitating interactions among investors, the geographical dispersion of forex markets confines traders' expertise to domestic currencies due to the cost of information gathering, thereby culminating in home bias behavior. Espousing geographic proximity theory, we endeavor to explore leading traders' home bias propensities on forex social trading platforms and uncover how such behaviors may affect their performance and their appeal to followers from afar. Furthermore, we strive to delve into the role of governmental transparency of currency issuers on reconciling followers' preference for profitable home-biased leading traders. In so doing, we quantify the influence of geographic proximity on leading traders' performance and followers' subscription tactics, which in turn yield insights into optimized emulative trading strategies for forex social trading.
| Original language | English |
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| Publication status | Published - Jul 2019 |
| Externally published | Yes |
| Event | 23rd Pacific Asia Conference on Information Systems: Secure ICT Platform for the 4th Industrial Revolution, PACIS 2019 - Xi'an, China Duration: 8 Jul 2019 → 12 Jul 2019 |
Conference
| Conference | 23rd Pacific Asia Conference on Information Systems: Secure ICT Platform for the 4th Industrial Revolution, PACIS 2019 |
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| Country/Territory | China |
| City | Xi'an |
| Period | 8/07/19 → 12/07/19 |
Keywords
- Forex social trading
- Geographic proximity
- Governmental transparency
- Home bias behavior
ASJC Scopus subject areas
- Information Systems