Stock Message Boards A Quantitative Approach to Measuring Investor Sentiment

by Zhang, Ying

• ISBN13: 9781137374172
• ISBN10: 1137374179
• Format: Hardcover
• Copyright: 2014-12-04
• Publisher: Palgrave Macmillan

Summary

New media is playing an important role in the financial world. Rapid growth in stock market message boards, chat rooms, and other electronic means for investors to share market information makes clear the ever-increasing demand for online stock trading. In addition to an increasing number of related sites and apps, growth in the number of investors participating has exploded. The U.S. Securities and Exchange Commission and the Federal Trade Commission are especially interested in tracking the activities on stock market message boards in order to protect market credibility.

Stock Message Boards provides empirical data to reveal how online communication not only impacts stock returns, but also volatility, trading volume, and liquidity, as well as a firm's value and reputation. Zhang demonstrates the long-term value of stock market message boards by using simple mathematics and statistics to show readers how to measure message board activities. This work argues that online message boards are more effective for small capitalization stocks than large capitalization stocks, and more prominent for financially-distressed firms than financially-sound firms.

Author Biography

Ying Zhang is Assistant Professor of Finance at Fairfield University, USA. His research focuses in the areas of behavioral finance, investments, and real estate. He has published articles in several finance and real estate journals, such as the Journal of Banking and Finance, the Financial Review, the Journal of Financial Research, and the Journal of Real Estate Finance and Economics.

Table of Contents

1. Why Pay Attention to Stock Message Boards?
2. A Variety of Stock Message Boards
3. About Stock Message Board Posters
4. Why Do People Post Messages on Stock Message Boards?
5. Modeling the Value of a Stock Message Board
6. How to Measure Stock Message Boards' Activities
7. Patterns in Stock Message Board Posting Activities
8. Online Talk: Does It Matter at All?
9. Trading Strategies Based on Stock Message Board Information
10. Legal Issues Associated with Stock Message Board Posting
11. Whisperers Versus Analysts and Implications for Market Efficiency
12. Alternative Information on the Internet
13. Implications of Stock Message Boards
14. The Future of Stock Message Boards
15. Literature Review for Stock Message Board Studies