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The Information Content of Indirect Insider Trading: Empirical Evidence from Vietnam Security Market

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  • Han-Ching Huang
  • William Indajang

Abstract

In this paper, we discuss the relationship among indirect insider trading, opportunistic trading and investment horizon in Vietnam security market. Goldie, Jiang, Koch and Wintoki [10] find that in order to camouflage opportunistic trading, insiders trade through the accounts of family members, trusts, and foundations, known as indirect insider trading. According to Cohen, Malloy and Pomorski [5], opportunistic trading are strong predictors of future return. Akbas, Jiang, and Koch [1] document that the performance of short-horizon insiders to forecast future stock prices are better than that of long-horizon insiders since SH insiders are more likely to be unexpected, on average, when compared with the typical expected trade of LH insiders. Empirical results show that the impact of opportunistic trades in indirect insider trading on future return is stronger than that in direct insider trading. In indirect insider trading, the impact of opportunistic trades on future return is still stronger than that of routine trades. Moreover, we find that the impact of short-horizon insiders in indirect insider trading on future return is stronger than that in direct insider trading. In indirect insider trading, the impact of short-horizon insiders on future return is still stronger than that of long-horizon insiders. JEL classification numbers: G11, G14.

Suggested Citation

  • Han-Ching Huang & William Indajang, 2022. "The Information Content of Indirect Insider Trading: Empirical Evidence from Vietnam Security Market," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 12(3), pages 1-2.
    • Handle: RePEc:spt:apfiba:v:12:y:2022:i:3:f:12_3_2
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    More about this item

    Keywords

    Insider trading; Indirect insider trading; Opportunistic trading; Investment horizon.;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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