City Research Online

Corporate insiders’ exploitation of investors’ anchoring bias at the 52-week high and low

Lasfer, M. ORCID: 0000-0003-2338-672X & Ye, X. (2023). Corporate insiders’ exploitation of investors’ anchoring bias at the 52-week high and low. The Financial Review, 59(2), pp. 391-432. doi: 10.1111/fire.12371


We find that insiders adopt dissimulation strategies to conceal their informational advantage and trade profitably when their firms’ stock prices reach 52-week highs and lows, exploiting the anchoring biases of uninformed investors. Insiders’ trading profitability depends on their firms’ future stock returns, operating efficiency, and investment sentiment, but not on earnings surprises. We document that male board members and insiders with long investment horizons are more likely to use dissimulation strategies. Overall, we provide evidence that insiders benefit from these price extremes, despite their status as publicly available, irrelevant, historical price levels that normally should not predict future stock returns.

Publication Type: Article
Additional Information: This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited. ©2023 The Authors. The Financial Review published byWiley Periodicals LLC on behalf of Eastern Finance Association.
Publisher Keywords: insider trading, 52-week price high/low, anchoring bias, recency bias, trading strategies, stock market anomalies
Subjects: H Social Sciences > HG Finance
Departments: Bayes Business School > Finance
SWORD Depositor:
[thumbnail of The Financial Review - 2023 - Lasfer - Corporate insiders  exploitation of investors  anchoring bias at the 52‐week high.pdf]
Text - Published Version
Available under License Creative Commons: Attribution International Public License 4.0.

Download (480kB) | Preview
[thumbnail of Lasfer and Ye 2023 Corporate Insiders Exploitation of investors anchoring at 52 Week High and Low-Final.pdf] Text - Accepted Version
This document is not freely accessible due to copyright restrictions.

To request a copy, please use the button below.

Request a copy


Add to AnyAdd to TwitterAdd to FacebookAdd to LinkedinAdd to PinterestAdd to Email


Downloads per month over past year

View more statistics

Actions (login required)

Admin Login Admin Login