Informationless trades

Definition:

Trades that are the result of either a reallocation of wealth or an implementation of an investment strategy that acts only on existing information. That is, an investor might sell a large block of stock -- not because they have information that leads them to think the stock will fall in value -- but because they might need the cash for some other investment.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Portfolio opportunity set

The expected return/standard deviation pairs of all portfolios that can be constructed from a given set of assets.

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