@article{c9adcbf108244e2a9a708ab1be5e5973,
title = "Do superstitious traders lose money?",
abstract = "Do superstitious traders lose money? We answer this question in the context of trading in the Taiwan Futures Exchange, where we exploit the Chinese superstition that the number 8 is lucky and the number 4 is unlucky. We find that individual investors, but not institutional investors, submit disproportionately more limit orders at 8 than at 4. This imbalance, defined as the “superstition index” for each investor, is positively correlated with trading losses. Superstitious investors lose money mainly because of their bad market timing and stale orders. Nevertheless, the reliance on number superstition for limit order submissions does decrease with trading experience.",
keywords = "Individual investors, Investment performance, Limit order clustering, Superstition",
author = "Utpal Bhattacharya and Kuo, {Wei Yu} and Lin, {Tse Chun} and Jing Zhao",
note = "Funding Information: The authors thank two anonymous referees and an associate editor for their insightful comments, and the Taiwan Futures Exchange for providing the data. T.-C. Lin gratefully acknowledges research support from the Faculty of Business and Economics, the University of Hong Kong, and the Research Grants Council of the Hong Kong SAR government. The authors also thank Darwin Choi, Ilia Dichev, Mark Grinblatt, Craig Holden, Stacey Jacobsen, Jay Ritter, and Noah Stoffman, as well as seminar participants at Chinese University of Hong Kong, CKGSB, Indian Institute of Technology (Kharagpur), Peking University (both in Beijing and in Shenzhen), RSM Erasmus, University of Florida, Tsing Hua University, Southwestern University of Economics and Finance, Wuhan University, Zhongnan University of Economics and Law, Fudan University, National Chung Cheng University, Singapore Management University, Australasian Finance and Banking Conference (2014), China International Conference of Finance (2015), and Financial Management Association{\textquoteright}s Annual Meeting (2015) for their comments. Any remaining errors are authors{\textquoteright} responsibility. Funding Information: History: Accepted by Amit Seru, finance. Funding: W.-Y. Kuo expresses his gratitude to the Ministry of Science and Technology of Taiwan [Project MOST 103-2410-H-004-077-MY2] and E.SUN Commercial Bank for their financial support. SupplementalMaterial: The online appendix is available at https://doi.org/10.1287/mnsc.2016.2701. Publisher Copyright: {\textcopyright} 2017 INFORMS.",
year = "2018",
month = aug,
doi = "10.1287/mnsc.2016.2701",
language = "English",
volume = "64",
pages = "3772--3791",
journal = "Management Science",
issn = "0025-1909",
publisher = "INFORMS Institute for Operations Research and the Management Sciences",
number = "8",
}