International Journal For Multidisciplinary Research

E-ISSN: 2582-2160   •   Impact Factor: 9.24

A Widely Indexed Open Access Peer Reviewed Multidisciplinary Bi-monthly Scholarly International Journal

Call for Paper Volume 6 Issue 6 November-December 2024 Submit your research before last 3 days of December to publish your research paper in the issue of November-December.
Submit Research Paper Join as a Reviewer

Plagiarism is checked by the leading plagiarism checker TurnItIn

Call for Paper

Volume 6 Issue 6
November-December 2024

Submit your research paper

Indexing Partners
Academia Advanced Sciences Index Bielefeld Academic Search Engine CiteSeer DRJI Google Scholar Independent Search Engine & Directory Network ISI (International Scientific Indexing) Issuu Mendeley Research Networks
RefSeek ResearcherId - Thomson Reuters ResearchGate Scirus Scribd Semantic Scholar UTeM - Universiti Teknikal Malaysia Melaka Wiki for Call for Papers WorldCat Zenodo

Behavioural Biases in Equity, Futures, and Options Trading: Implications for Market Efficiency

Author(s) Dr. Vikas Kumar Jaiswal
Country India
Abstract This research paper presents a comprehensive analysis of behavioural biases among traders operating in the equity, futures, and options segments of financial markets. The study aims to understand the psychological factors influencing trading decisions, risk perception, and trading strategies. By exploring the impact of behavioural biases on market efficiency and stability, this research contributes to the growing field of behavioural finance.
Using a mixed-method approach, the study collected data through surveys, interviews, and behavioural experiments from a diverse group of traders, including retail investors and institutional participants. The analysis focused on identifying common behavioural biases such as overconfidence, loss aversion, herding behaviour, anchoring, and the disposition effect.
The findings reveal that behavioural biases are prevalent among traders in all three segments. Overconfidence leads to excessive trading and underestimation of risks, while loss aversion influences risk aversion and reluctance to exit losing positions. Herding behaviour results in the formation of market bubbles and crashes, and anchoring affects traders' reliance on past information to make decisions. The disposition effect influences traders to hold onto losing positions longer than profitable ones.
The study also highlights the impact of behavioural biases on trading strategies and risk management practices. Traders tend to exhibit risk-seeking behaviour during periods of market euphoria and become risk-averse during times of uncertainty and volatility. Moreover, behavioural biases can lead to suboptimal portfolio allocation and performance outcomes.
The implications of these findings for market efficiency and stability are significant. Behavioural biases can contribute to market inefficiencies, distorted price patterns, and increased market volatility. As a result, market participants and regulators must address these biases to foster more informed decision-making and improve market outcomes.
To mitigate the impact of behavioural biases, the study recommends trader education programs focusing on behavioural finance principles and risk management techniques. Additionally, market regulators should implement measures to promote transparency and discourage excessive speculative trading.
In conclusion, this research underscores the importance of understanding behavioural biases in equity, futures, and options trading. By shedding light on the psychological drivers of trading behaviour, this study provides valuable insights for traders, financial institutions, and policymakers to enhance market efficiency and stability in the face of behavioural challenges.
Keywords Traders, Equity, Futures, Options, Behavioural Biases, Cognitive Biases, Decision-Making, Market Dynamics, Risk Perception, Price Distortions, Market Inefficiencies, Volatility, Risk Management.
Field Sociology > Economics
Published In Volume 5, Issue 4, July-August 2023
Published On 2023-07-29
Cite This Behavioural Biases in Equity, Futures, and Options Trading: Implications for Market Efficiency - Dr. Vikas Kumar Jaiswal - IJFMR Volume 5, Issue 4, July-August 2023. DOI 10.36948/ijfmr.2023.v05i04.4787
DOI https://doi.org/10.36948/ijfmr.2023.v05i04.4787
Short DOI https://doi.org/gsjjp8
View / Download PDF File

Share this



E-ISSN 2582-2160
CrossRef

CrossRef DOI is assigned to each research paper published in our journal.

IJFMR DOI prefix is
10.36948/ijfmr

Downloads
Research Paper Format Copyright Permission Form and Undertaking Form Cover Page Vol 6 Isu 6Cover Page Vol 6 Isu 5Cover Page Vol 6 Isu 4

All research papers published on this website are licensed under Creative Commons Attribution-ShareAlike 4.0 International License, and all rights belong to their respective authors/researchers.

CC-BY-SA Open Access

About IJFMR
Fees & Payment
Current Issue
Publication Archive 		Submit Research Paper
Track Submission Status
Publication Guidelines
Publication Ethics
Peer Review & Plagiarism 		Join as a Reviewer
Editors & Reviewers
Reviewer Referral Program
Get Reviewer Membership Certi. 		Website/Journal Policies
Usage Policy
Content Policies
Privacy Policy
Contact Us +91-9898-5948-55 editor@ijfmr.com