Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/330308 
Authors: 
Year of Publication: 
2025
Series/Report no.: 
Deutsche Bundesbank Discussion Paper No. 29/2025
Publisher: 
Deutsche Bundesbank, Frankfurt a. M.
Abstract: 
This paper shows that, in a setup 'a la Kyle (1985), correlated retail trading opens up new profit opportunities for professional investors at the expense of retail investors. Additionally, it demonstrates that market quality can benefit through higher market liquidity and higher price efficiency. Our results lend support to concerns that social trading via Finfluencers and stock message boards harms rather than benefits retail investors.
Subjects: 
social trading
noise trading
non-fundamental information
strategic trading
JEL: 
G12
G14
ISBN: 
978-3-98848-050-7
Document Type: 
Working Paper

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