PT  - JOURNAL ARTICLE
AU  - Ryan Garvey
AU  - Fei Wu
TI  - Professional Trader Order-Selection and Prior Outcomes
AID  - 10.3905/jot.2007.694826
DP  - 2007 Sep 30
TA  - The Journal of Trading
PG  - 23--33
VI  - 2
IP  - 4
4099  - https://pm-research.com/content/2/4/23.short
4100  - https://pm-research.com/content/2/4/23.full
AB  - We examine whether prior outcomes influence the order selection decisions of proprietary stock traders who trade the capital of a National Securities Dealer. Trader's decision to either take or provide liquidity is correlated with their prior trading performance. When traders experience increasing trading gains or decreasing trading losses, they subsequently increase the rate at which they take liquidity. These finding are consistent with behavioral theories on sequential decision-making. The trader's behavior appears suboptimal because traders who systematically deviate from their normal order submission strategies experience lower profitability.TOPICS: Accounting and ratio analysis, exchanges/markets/clearinghouses