Journal of Financial Markets 2026
The price impacts of informed investors
open access
Abstract
We empirically identify a group of stock-exchange accounts that profit from 11 years of earnings surprises. Their trading behavior is consistent with privately informed trading, yet they have negative and temporary price impacts. We then empirically identify a second group of accounts that have positive and permanent price impacts. The trading behavior of the second group is more consistent with trading on public information, and they trade the wrong way before earnings surprises. The behavior of both account groups contrasts with models that associate permanent price impact with privately informed trading.
- DOI
- 10.1016/j.finmar.2026.101058
- Pages
- 101058
- Language
- en
- Sources
- crossref openalex