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The University of Southampton
Centre for Risk Research

What threat do spread traders pose to financial markets?  Event

Time:
13:00 - 14:00
Date:
3 June 2013
Venue:
Room 1013, Building 58a, Highfield Campus, University of Southampton.

For more information regarding this event, please telephone Dr Ian Dawson on 02380 598094 or email i.g.dawson@soton.ac.uk .

Event details

In a forthcoming Centre for Risk Research seminar, PhD student Sarist Gulthawatvichai will present his research examining the extent to which herding behaviour amongst spread traders might now threaten financial markets.

The Wisdom of the Crowd?

Sarist summarised the content of his seminar, which is entitled "The threat to financial markets posed by spread traders: Unearthing the extent and nature of their herding behaviour", in the following Abstract:

"No studies have examined herding in financial spread-trading markets. This is surprising given the increasing significance of these markets and their impact on the underlying financial markets. This paper fills this important gap by employing a unique dataset from UK spread-trading markets (2010-2012). We contrast the trading behavior of more and less informed traders. Specifically, we discern the intensity (strong vs. weak), the nature (self- vs. cross-herding between more and less informed traders) and the patterns of their herding behavior (via their feedback strategies) and we examine the speed that more and less informed traders react to shocks. Our results confirm that there is a relationship between the herding strategies employed by more and less informed traders and less informed traders appear to respond to shocks slowly. Overall, our findings suggest that spread traders, particularly the less informed spread traders, are prone to herding activity and we examine the threat this may cause to the stability of underlying financial markets."

Sarist Gulthawatvichai's PhD is supervised by Professors Ming Chien Sung and Johnnie Johnson. Sarist's research is mainly focused on behavioural finance, especially in spread-trading markets. He was awarded his MSc in International Financial Markets in 2010. Prior to his MSc, he worked in the Stock Exchange of Thailand (SET).

Speaker information

Sarist Gulthawatvichai,Centre for Risk Research PhD Student

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