Abstract
This paper studies the relation between credit provision and stock trading behavior. We collect every stock transaction of three major British companies during the 1720 South Sea
Bubble and link stock trading to margin loan positions with the Bank of England. We give insight in the selection of traders into the loan facility by comparing trading behavior and
realized returns of borrowers to other traders. We find that loan holders are more likely to buy following high returns and document strong underperformance of borrowers.
Bubble and link stock trading to margin loan positions with the Bank of England. We give insight in the selection of traders into the loan facility by comparing trading behavior and
realized returns of borrowers to other traders. We find that loan holders are more likely to buy following high returns and document strong underperformance of borrowers.
| Original language | English |
|---|---|
| Place of Publication | Journal of Financial and Quantitative Analysis |
| Publisher | Cambridge University Press |
| Number of pages | 48 |
| DOIs | |
| Publication status | E-pub ahead of print - 16 Oct 2023 |
Publication series
| Name | Journal of Financial and Quantitative Analysis |
|---|---|
| Publisher | Cambridge University Press |
| ISSN (Print) | 0022-1090 |
Keywords
- Credit
- Bubble
- Margin Loans
- Investor biases