The Anatomy of Day Traders
Open accessAbstract
This paper examines the complete trading records of all day traders in Finland. A typical day trader is a male in his late 30s, who lives in the metropolitan area and trades in larger quantities than an investor in a size-matched control group even after ignoring day trades. These traders day-trade stocks that grab their attention, that they own, or that they have day-traded before. They pay close attention to the state of the limit order book, are very active near the end of the trading session, and are strongly deterred by losses. Day traders do not earn better returns than investors in the control group. Their realized returns from day trades are high, but these returns are not representative of overall performance because of their strong reluctance to realize losses.
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Linnainmaa (2003) analyzes 7,686 investors who complete at least one roundtrip intraday transaction; the majority day trade on only one or two occasions and in aggregate complete only 185,000 day trading related trades over a two-and-a-half year period.
“Linnainmaa (2003) analyzes 7,686 investors who complete at least one roundtrip intraday transaction. These investors are far less active than those studied by Harris and Schultz (1998) and Garvey and Murphy (2005a). The majority of these investors day trade on only one or two occasions and, in aggregate, these investors complete only 185,000 day trading related trades over a two-and-a-half year”
From The cross-section of speculator skill: Evidence from day trading (2014) · cites this paper as Linnainmaa (2003)
Cites
Trading Is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors
Barber, B. M., & Odean, T. (2000) · The Journal of Finance · doi:10.1111/0022-1082.00226 · Cited by 3,955 · see citing works
Odean, T. (1999) · American Economic Review · doi:10.1257/aer.89.5.1279 · Cited by 2,247 · see citing works
Flagged first, then by citations
Cited by
Sorted by citations
Driven to Distraction: Extraneous Events and Underreaction to Earnings NewsPreprint
Hirshleifer, D. A., Lim, S. S., & Teoh, S. (2009) · SSRN Electronic Journal · doi:10.2139/ssrn.980958 · Cited by 1,492 · see citing works
“individual investors to earn positive excess returns in the month after their trades; Linnainmaa (2003) finds that individual day traders in Finland provide liquidity to the market through limit orders and on average profit during the day by doing so.”
BackgroundJust how much do individual investors lose by trading?
Barber, B. M., Lee, Y.-T., Liu, Y.-J., & Odean, T. (2009) · Review of Financial Studies · doi:10.1093/rfs/hhn046 · Cited by 953 · see citing works
“For studies of the performance of individual investors, see Schlarbaum, Lewellen, and Lease (1978a, 1978b); Odean (1999); Barber and Odean (2000, 2001); Grinblatt and Keloharju (2000); Goetzmann and Kumar (forthcoming); and Linnainmaa (2003a, 2003b) .”
Limited Investor Attention and Stock Market Misreactions to Accounting Information
Hirshleifer, D. A., Lim, S. S., & Teoh, S. H. (2010) · The Review of Asset Pricing Studies · doi:10.1093/rapstu/rar002 · Cited by 535 · see citing works
“Linnainmaa (2003) finds that individual day traders in Finland provide liquidity to the market through limit orders and on average profit during the day by doing so.”
BackgroundInstitutional Investors, Past Performance, and Dynamic Loss Aversion
O’Connell, P. G. J., & Teo, M. (2009) · Journal of Financial and Quantitative Analysis · doi:10.1017/s0022109009090048 · Cited by 158 · see citing works
“This paper offers fresh insights into the trading behavior of institutional investors and challenges the classical finance view that behavioral biases are “an annoying but essentially harmless anomaly, confined to retail investors and experimental subjects” (Locke and Mann (2005)).”
BackgroundResultInfluentialThe cross-section of speculator skill: Evidence from day trading
Barber, B. M., Lee, Y.-T., Liu, Y.-J., & Odean, T. (2014) · Journal of Financial Markets · doi:10.1016/j.finmar.2013.05.006 · Cited by 112 · see citing works
“For example, using data from Finland, Grinblatt, Keloharju, and Linnainmaa (2012) document that the buys of high IQ investors outperform those of low IQ investors by 4.4 bps per day in the days immediately following the purchase. Using data from a large U.S. discount broker, Coval, Hirshleifer, and Shumway (2005) docu…”
InfluentialHow Investors Trade Around Interim Earnings Announcements
Vieru, M., Perttunen, J., & Schadewitz, H. J. (2006) · Journal of Business Finance & Accounting · doi:10.1111/j.1468-5957.2006.01358.x · Cited by 31 · see citing works
Attention triggers and investors’ risk-takingPreprint
Arnold, M., Pelster, M., & Subrahmanyam, M. (2021) · Journal of Financial Economics · doi:10.2139/ssrn.3612799 · Cited by 40 · see citing works
“This observation is consistent with previous studies that report that the active investor is, on average, a male in his late 30s (e.g., Linnainmaa, 2003).”
Experts Online: An Analysis of Trading Activity in a Public Internet Chat RoomPreprint
Mizrach, B., & Weerts, S. (2009) · SSRN Electronic Journal · doi:10.2139/ssrn.1118022 · Cited by 39 · see citing works
“A more specialized literature has focused on day traders. Linnainmaa (2003) has a compre-”
Do Day Traders Rationally Learn About Their AbilityPreprint
Barber, B., Lee, Y.-T., Liu, Y.-J., & Odean, T. (2014) · SSRN Electronic Journal · doi:10.2139/ssrn.2535636 · Cited by 35 · see citing works
“Linnainmaa (2003) analyzes 7,686 Finnish day traders. profits.”
Day trading and stock price volatility
Kyröläinen, P. (2008) · Journal of Economics and Finance · doi:10.1007/s12197-007-9006-2 · Cited by 32 · see citing works
Arthur, J. N., Delfabbro, P., & Williams, R. (2016) · The Journal of Gambling Business and Economics · doi:10.5750/jgbe.v9i3.1034 · Cited by 30 · see citing works
Noise Trading and Volatility: Evidence from Day Trading and Message BoardsPreprint
Koski, J., Rice, E. M., & Tarhouni, A. (2004) · SSRN Electronic Journal · doi:10.2139/ssrn.533943 · Cited by 30 · see citing works
Barber, B. M. (2019) · Review of Asset Pricing Studies · doi:10.1093/rapstu/raz006 · Cited by 27 · see citing works
“Linnainmaa (2003) analyzes 7,686 Finnish day traders.”
InfluentialThe Limits of Noise Trading: An Experimental AnalysisPreprint
Bloomfield, R. J., O'Hara, M., & Saar, G. (2005) · SSRN Electronic Journal · doi:10.2139/ssrn.680786 · Cited by 23 · see citing works
Chague, F., De-Losso, R., & Giovannetti, B. (2019) · SSRN Electronic Journal · doi:10.2139/ssrn.3423101 · Cited by 13 · see citing works
Terror attacks and individual investor behavior: Evidence from the 2015–2017 European terror attacks
Hasso, T., Pelster, M., & Breitmayer, B. (2020) · Journal of Behavioral and Experimental Finance · doi:10.1016/j.jbef.2020.100397 · Cited by 11 · see citing works
The effect of risk-taking behavior on profitability: Evidence from futures market
Cheng, T. Y., Lee, C. I., & Lin, C. H. (2019) · Economic Modelling · doi:10.1016/j.econmod.2019.04.017 · Cited by 12 · see citing works
How Do Institutional Investors TradePreprint
O'Connell, P. G. J., & Teo, M. (2004) · SSRN Electronic Journal · doi:10.2139/ssrn.559414 · Cited by 3 · see citing works
“Other studies have found that retail investors (Odean, 1988), day traders (Linnainmaa, 2003), and futures floor traders (Locke and Mann, 2003) are reluctant to realize their losses, i.e., these investors are prone to the disposition effect.”
BackgroundShould Retail Investors' Leverage Be Limited?Preprint
Heimer, R. Z., & Simsek, A. (2019) · SSRN Electronic Journal · doi:10.2139/ssrn.2150980 · Cited by 1 · see citing works
“Individuals that are unbiased in autonomous economic contexts produce overconfident selfassessments when introduced to an observational social setting (Proeger and Meub (2014)).”
Investor returns and re-intermediation: A case of PPDai.com
Zeng, P.-Z., Peng, G., Liu, Y., & Lv, B.-F. (2017) · doi:10.5897/ajbm2017.8308 · Cited by 1
“This study also contributes to the literature on the performance of individual investors in the financial market (Schlarbaum et al., 1978a, b; Odean, 1999; Barber and Odean, 2001; Grinblatt and Keloharju, 2000; Linnainmaa, 2003).”
ResultWhat You Watch in Markets Matters: Attention to Information Versus Attention to Prices
Dhawan, A., & Putniņš, T. J. (2026) · Abacus. A Journal of Accounting and Business Studies · doi:10.1111/abac.70049
- Authors
- Linnainmaa, J. T.
- Affiliations
- Dartmouth College (US)
- Corresponding author
- Linnainmaa, Juhani T.
- Venue
- SSRN Electronic Journal
- Publisher
- Elsevier BV
- Published
- 2003
- ISSN
- 1556-5068 (ISSN-L)
- OpenAlex
- W1533979795
- Cited by
- 29
- References
- 0
- Citations by year
- 2026: 1 · 2025: 1 · 2023: 1 · 2020: 3 · 2019: 1 · 2017: 2 · 2016: 1 · 2013: 2 · 2012: 1
- Type
- posted content
- Language
- en
- Open access
- green
- doi.org
- Locations
- SSRN Electronic Journal (acceptedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Finance › Financial Markets and Investment Strategies
- Social Sciences › Decision Sciences › General Decision Sciences › Decision-Making and Behavioral Economics
- Social Sciences › Business, Management and Accounting › Accounting › Financial Literacy, Pension, Retirement Analysis
- Keywords
- day trading, trading behavior, investor characteristics, limit order book, loss aversion, realized returns, trading volume, investor performance
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