EconStor >
Universität Kassel >
Fachbereich Wirtschaftswissenschaften, Universität Kassel >
Volkswirtschaftliche Diskussionsbeiträge, Universität Kassel >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/32146
  
Title:Big elephants in small ponds: do large traders make financial markets more aggressive? PDF Logo
Authors:Bannier, Christina E.
Issue Date:2004
Series/Report no.:Volkswirtschaftliche Diskussionsbeiträge 77
Abstract:Market participants often suspect that large traders have a disproportionate effect on financial markets, increasing the aggressiveness of market responses. Prior studies have shown that the impact of a large trader on a currency crisis depends positively on his size and informational position. By contrast, this article highlights the role that market sentiment has on the impact of a large trader. If the market believes that fundamentals are weak, then the probability of a crisis depends positively on the trader's size but negatively on the precision of his information, with these effects reversed in a generally optimistic market. A large player, therefore, need not make market responses more aggressive.
Subjects:currency crises
large traders
market sentiment
coordination
private and public information
JEL:F31
D82
Document Type:Working Paper
Appears in Collections:Volkswirtschaftliche Diskussionsbeiträge, Universität Kassel

Files in This Item:
File Description SizeFormat
507759230.pdf590.38 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/32146

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.