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The University of Southampton
Centre for Risk Research

Analysing the Impact of Online News on Individuals’ Sequential Trading Decisions Event

Miss He He
13:00 - 14:00
19 March 2021
Online, MS Teams

For more information regarding this event, please email Dr Mario Brito at .

Event details


Investors are constantly exposed to massive news coverage and fast information flow, yet there is limited research quantifying the impact of news on investors’ risky decision-making at the individual level. This study investigates the role of the news environment playing in individual sequential trading behaviour by analysing a ten-year dataset that includes 20 million news items and 8.5 million trades of 29,434 individual investors in the UK. A fixed-effect model is employed to control for the individual heterogeneity, and an instrumental variable approach is used to address potential endogenous issues associated with the empirical data.

The analysis shows that in sequential trading activities, prior gains lead individuals to increase subsequent trading volume in general. In particular, the impact of prior gains depend on the news sentiment environment when the gains were made: the magnitude of increase in subsequent trading volume following prior gains is greater/smaller when the news sentiment is favourable/unfavourable for the gain-making trading decisions. However, we did not find evidence for individuals’ responses to prior gains to be impacted by the number of neutral news stories (i.e., news that holds a neutral view of the firms reported).

Previous studies typically focus on the independent effect of news sentiment on individual trading. They argue that news affects individuals by inducing them to simply excessively buy the assets that are covered more extensively in the news, regardless of the news sentiment. Our study, however, investigates the moderating effect of news sentiment and shows that news sentiment can alter an individual’s response to their prior trading gains. Our findings highlight the importance of accounting for contextual factors such as news environment when analysing individual sequential risky decisions. 



Miss He He is a PhD candidate in Centre for Risk Research at Southampton Business School, under the supervision of Dr Tiejun Ma, Professor Ming-Chien Sung and Emeritus Professor Johnnie Johnson, with expected graduation in 2021-22.

Her primary research interest is to understand the impact of online news environment on individuals' decision making and risk taking, using methodologies that bridges the models of economics and insights of behavioural science.

In her PhD, the main research focus has been on quantifying the impact of positive and negative news sentiment on individual trading decisions, including the buying/selling decisions, size of investment, trading frequency, etc. She applied quantitative modelling, data science and text mining techniques in the analysis of news stories and individual trading behaviour. In a related project, she implemented a news classification framework to decompose the impact of news on financial markets into various risk components by classifying news stories based on attributes like the news sources and topics.

Her PhD project is fully funded by Xiamen-Southampton scholarship scheme and China Scholarship Council for 4 years. Prior to starting PhD, He He received her Bachelors’ Degree of Economics from Xiamen University (China), where she was awarded the Yanan Prize, the university's highest undergraduate award.

Speaker information

Miss He He ,PhD candidate, Centre for Risk Research, Southampton Business School, University of Southampton,Email:

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