Engagement and learning through social software in finance : a retrospective on the Trading Room experience

The introduction of a social software blog space called the Trading Room in an undergraduate finance unit generated a great deal of activity to support student learning. A subsequent evaluation of this innovation, viewed through the lens of Activity Theory, demonstrated that students perceived high value in the opportunity it provided for them to reaffirm theories, obtain individualised feedback and benchmark their work against others. While assessment is generally seen as the carrot and the stick of learning; students in the study reported that they would still participate in reading and posting to the Trading Room even if there was no assessment requirement. Students did not see any value in the environment as a purely social space, reporting that they saw it primarily as a professional educational community. It would appear that just as there are different communities in the real world social space, there are also different types of communities in the online space.

Is carbon emissions trading profitable?

The European Carbon Emissions Trading Scheme introduced in 2005 has led to both spot and futures market trading of carbon emissions. However, despite seven years of trading, we have no knowledge on how profitable carbon emissions trading is. In this paper, we first test whether carbon forward returns predict carbon spot returns. We find strong evidence on both in-sample and out-of-sample predictability. Based on this evidence, we forecast carbon spot returns using both carbon forward returns and a constant. We consider a mean-variance investor and a CRRA investor, and show that they have higher utility and can make more statistically significant profits by following forecasts generated from the forward returns model than from a constant returns model.

Management trading in Chinese entrepreneurial firms on the ChiNext

We examine management trading in Chinese entrepreneurial firms on the ChiNext. We find that management shareholdings are considerably high, and executives tend to sell their shares after the IPOs on the ChiNext. The propensity for executives to sell shares is negatively correlated with the firms corporate governance and current operating cash flows, but the amount they sell is only positively correlated with the level of management holdings. Both the management selling decision and percentage of selling do not associate with firms earnings and sales growth. This suggests that managers are profit makers rather than informed traders in their selling activities on the ChiNext. We also find that the market reaction to management selling is substantially negative, which implies a herding effect of investors following executives to sell shares.

Is exchange rate trading profitable?

We Test whether exchange rate trading is profitable in the emerging markets of Brazil, China, India, And South Africa. Using Momentum trading strategies applied to high frequency data, we discover that: (a) momentum-based trading strategies lead to statistically significant profits from the currencies of all four emerging markets; (b) The South African Rand Is generally the most profitable, followed by the Brazilian Real And the Indian Rupee; (c) Profits are persistent during the day and are trading frequency dependent; and (d) During the period of the global financial crisis currency profits were maximised.