The impact and profitability of day trading following the relaxation of day trading restrictions in Taiwan
The relaxation of day trading restrictions in Taiwan at the start of 2016 resulted in a significant increase in day trading volume, which piqued our interest in researching the impact and profitability of day trading, expected (unexpected) day trading, and day trading at high (low) levels of VIX usi...
| Main Authors: | , , , , |
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| Format: | Article |
| Language: | English |
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Elsevier
2023-04-01
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| Series: | Heliyon |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2405844023021461 |
| _version_ | 1797837011981172736 |
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| author | Wan-Hsiu Cheng Yuhsin Chen Paoyu Huang Yensen Ni Mei-Chu Liang |
| author_facet | Wan-Hsiu Cheng Yuhsin Chen Paoyu Huang Yensen Ni Mei-Chu Liang |
| author_sort | Wan-Hsiu Cheng |
| collection | DOAJ |
| description | The relaxation of day trading restrictions in Taiwan at the start of 2016 resulted in a significant increase in day trading volume, which piqued our interest in researching the impact and profitability of day trading, expected (unexpected) day trading, and day trading at high (low) levels of VIX using time series models, with the following key findings. First, we show that a high market trading volume triggers a high day trading volume resulting from liquidity markets that day traders prefer, but a high day trading volume does not trigger a high market trading volume resulting from speculative markets that other market participants don't prefer. Second, contrary to our perception, while the VIX index rises, day trading would be more profitable after the relaxation. We infer that a high VIX index may be accompanied by a volatile market, which may generate profits by widening the intraday spread of a day-tradable stock. Third, as compared with unexpected market trading volume, we reveal that unexpected day trading volume may be more unexpected than market trading volume, being more likely to enhance market volatility and stock returns. These impressive and interesting findings may not be disclosed before the relaxation, which may contribute to the existing literature. |
| first_indexed | 2024-04-09T15:18:05Z |
| format | Article |
| id | doaj.art-4000ea5ae0084b2991c485b4dec605b6 |
| institution | Directory Open Access Journal |
| issn | 2405-8440 |
| language | English |
| last_indexed | 2024-04-09T15:18:05Z |
| publishDate | 2023-04-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Heliyon |
| spelling | doaj.art-4000ea5ae0084b2991c485b4dec605b62023-04-29T14:51:45ZengElsevierHeliyon2405-84402023-04-0194e14939The impact and profitability of day trading following the relaxation of day trading restrictions in TaiwanWan-Hsiu Cheng0Yuhsin Chen1Paoyu Huang2Yensen Ni3Mei-Chu Liang4Department of Banking and Finance, Tamkang University, New Taipei, TaiwanDepartment of Accounting, Chung Yuan Christian University, Taoyuan, TaiwanDepartment of International Business, Soochow University, Taipei, TaiwanDepartment of Management Sciences, Tamkang University, New Taipei, Taiwan; Corresponding author. Department of Management Sciences, Tamkang University, No.151, Yingzhuan Rd., Tamsui Dist., New Taipei City 25137, Taiwan.Department of Banking and Finance, Tamkang University, New Taipei, TaiwanThe relaxation of day trading restrictions in Taiwan at the start of 2016 resulted in a significant increase in day trading volume, which piqued our interest in researching the impact and profitability of day trading, expected (unexpected) day trading, and day trading at high (low) levels of VIX using time series models, with the following key findings. First, we show that a high market trading volume triggers a high day trading volume resulting from liquidity markets that day traders prefer, but a high day trading volume does not trigger a high market trading volume resulting from speculative markets that other market participants don't prefer. Second, contrary to our perception, while the VIX index rises, day trading would be more profitable after the relaxation. We infer that a high VIX index may be accompanied by a volatile market, which may generate profits by widening the intraday spread of a day-tradable stock. Third, as compared with unexpected market trading volume, we reveal that unexpected day trading volume may be more unexpected than market trading volume, being more likely to enhance market volatility and stock returns. These impressive and interesting findings may not be disclosed before the relaxation, which may contribute to the existing literature.http://www.sciencedirect.com/science/article/pii/S2405844023021461G30G31G32 |
| spellingShingle | Wan-Hsiu Cheng Yuhsin Chen Paoyu Huang Yensen Ni Mei-Chu Liang The impact and profitability of day trading following the relaxation of day trading restrictions in Taiwan Heliyon G30 G31 G32 |
| title | The impact and profitability of day trading following the relaxation of day trading restrictions in Taiwan |
| title_full | The impact and profitability of day trading following the relaxation of day trading restrictions in Taiwan |
| title_fullStr | The impact and profitability of day trading following the relaxation of day trading restrictions in Taiwan |
| title_full_unstemmed | The impact and profitability of day trading following the relaxation of day trading restrictions in Taiwan |
| title_short | The impact and profitability of day trading following the relaxation of day trading restrictions in Taiwan |
| title_sort | impact and profitability of day trading following the relaxation of day trading restrictions in taiwan |
| topic | G30 G31 G32 |
| url | http://www.sciencedirect.com/science/article/pii/S2405844023021461 |
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