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Indiana University Bloomington

Department of Finance

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Research and Publications

Journal Articles

Who Trades with Whom? Individuals, Institutions, and Returns

2014, forthcoming Journal of Financial Markets

N. Stoffman


Using all trading in Finland over a fifteen-year period, I study the relation between price changes and the trading of individuals and financial institutions. On average, prices increase when institutions buy from individuals, and decrease when institutions sell to individuals. No such consistent pattern is observed when individuals trade with other individuals, or when institutions trade with other institutions. If prices do move while individuals trade among themselves, they quickly revert. These reversals occur as institutions trade with individuals in a direction that pushes prices toward previous levels.


Stoffman, Noah (2014), “Who Trades with Whom? Individuals, Institutions, and Returns,” Journal of Financial Markets, forthcoming.