QQual é a influência da busca de sensações e do excesso de confiança no volume de transações de Day Traders?

Abstract

Day trading, a high trading frequency mode of operating in the financial markets, is becoming more popular in Brazil and in the world. Many explanations have been given to try to clarify the motives that make investors and traders to trade excessively, fact that jeopardizes their performance and that has been widely documented in the related literature. One of them is the entertainment factor, motivated by certain personality traits and behavioral biases, like Sensation Seeking and Overconfidence. In this work it is done an online survey to evaluate what is impact of the behavioral aspects Sensation Seeking and Overconfidence on the trading volume of day traders in Brazil, investigating their facets and forms. Linear regressions between the variables were done, and then the stepwise technique was applied in order to eliminate the variables with the least explanatory power. It was found that the behavioral aspect Sensation Seeking measured by the aggregation of its four facets does not influence the transaction volume of day traders, since each facet must have a different impact on behavior. On the other hand, the facets Thrill and Adventure Seeking and Boredom Susceptibility/Impulsivity positively affected their volume, while the facet Experience Seeking affected it negatively and the facet Disinhibition had no effect at all. For the Overconfidence bias, its Overplacement form showed a positive effect on the transaction volume of day traders, while the Overestimation form presented a negative effect and the Overprecision had no effect at all. Furthermore, the self-reported monthly return of the sampled day traders also declined with the increase on trading volume. Day traders also reported a lower return than the position traders and presented greater scores of the Thrill and Adventure Seeking facet. These results show the multidimensional characteristics of the behavioral aspects Sensation Seeking and Overconfidence and lighten some of the motivations for day traders to overtrade. As of my knowledge, this is the first study that seeks to identify the relationship of Sensation Seeking and Overconfidence, considering their different facets and forms, in a more homogeneous sample of high frequency traders, that have mostly speculative reasons for trading.