Informed traders and price variations in the betting market for professional basketball games
Article Abstract:
This paper examines betting line changes from the opening to the closing of the point spread betting market on National Basketball Association games for evidence of informed trader betting. We show that within-betting period line changes significantly improve the accuracy of betting lines as forecasts of game outcomes. We examine individual line change magnitudes and show that these are directly and proportionately related to biases in opening lines. Further, line changes are of sufficient magnitude to remove these biases by the close of betting. We interpret these results as evidence that informed traders are influential in this market. (Reprinted by permission of the publisher.)
Publication Name: Journal of Finance
Subject: Business
ISSN: 0022-1082
Year: 1998
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Dividends, taxes, and signaling: evidence from Germany
Article Abstract:
The higher taxation of dividends in the United States gave rise to theories that explain why companies pay dividends. Tax-based signaling models propose that the higher tax on dividends is a necessary condition to make them informative about companies' values. In Germany, where dividends are not tax-disadvantaged and in fact are taxed lower for most investor classes, these models predict that dividends are not informative. However, we find that the stock price reaction to dividend news in Germany is similar to that found in the United States. This suggests other reasons, beyond taxation, that make dividends informative. (Reprinted by permission of the publisher.)
Publication Name: Journal of Finance
Subject: Business
ISSN: 0022-1082
Year: 1997
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Informed Traders, Intervention, and Price Leadership: A Deeper View of the Microstructure of the Foreign Exchange Market
Article Abstract:
Information asymmetries in the foreign exchange market are investigated, with a focus on Deutsche Bank price leadership prior to reports of Bundesbank intervention. Topics include the role of central bank intervention, the nature of high-frequency foreign exchange data, intervention-dependent price leadership effects, the unique position of Deutsche Bank in the DM/US$ market, Granger-causality tests in a time-varying framework, periodicity of quote indications, and time-varying parameter specification.
Publication Name: Journal of Finance
Subject: Business
ISSN: 0022-1082
Year: 1997
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