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SUMMARY:The Equity Market Implications of the Retail Investment Boom
DTSTART:20210302T121500
DTEND:20210302T131500
DTSTAMP:20260916T034806Z
UID:0da2cb26b3706cb815840c5457f8dd144071a0126a05d774745086f8
CATEGORIES:Conferences - Seminars
DESCRIPTION:V. Philippe\, PhD student SFI@EPFL and C. Jaunin\, PhD student
  UniL\nRetail trading activity has soared during the COVID-19 pandemic. Th
 is paper quantifies the impact of the retail investment boom on the US sto
 ck market within a structural model. Using account holdings data from the 
 online trading platform “Robinhood Markets Inc.” and 13F filings\, we 
 estimate retail and institutional demand curves and derive aggregate prici
 ng implications via market clearing. The inelastic nature of institutional
  demand allows Robinhood investors to have a substantial effect on stock r
 eturns during the COVID-19 pandemic. Despite their negligible market share
  of 0.2%\, we find that Robinhood traders account for 12% of the cross-sec
 tional variation in stock returns during the second quarter of 2020. We fu
 rthermore show that without the surge in retail trading activity the aggre
 gate market capitalization of the smallest quintile of US stocks would hav
 e been over 30% lower. Lastly\, Robinhood traders are able to affect the p
 rice of some large individual companies that are being held primarily by p
 assive institutional investors.
LOCATION:Zoom
STATUS:CONFIRMED
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