The Investment Behavior of Small Investors in the Hong Kong Derivatives Markets: A Statistical Analysis
Published: 2013
Author(s) Name: Tai-Yuen Hon |
Author(s) Affiliation: Department of Economics and Finance, Hong Kong Shue Yan University, Hong Kong
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Abstract
In the present study, we attempt to analyse and study
(1) what sort of events will initiate a psychological
instead of rational response from small investors, (2)
the decision making process when they are emotional,
and (3) the differences between their less-rational
actions and normal ones. The primary objective is to
investigate the factors, investing characteristics, and
decision making processes that affect Hong Kong’s
small investors who participate in derivatives markets.
Informed by behavioural finance, we develop several
hypotheses regarding the changes in the opinion
and investment behaviour of small investors during
global economic crisis. These hypotheses are then
tested with the data collected from 524 small investors
via a questionnaire survey. By doing so, we hope to
contribute to the study of behavioural finance in the
setting of an Asian financial centre, Hong Kong.
Keywords: Behavioural Finance, Overconfidence, Herd Behaviour, Mental Accounting, Disposition Effect, Derivatives Markets.
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