Trading against the grain: When insiders buy high and sell low

Ruihai Li, Xuewu Wang, Zhipeng Yan, Qunzi Zhang

Research output: Contribution to journalArticlepeer-review

3 Scopus citations


Both behavioral biases and informational advantages can drive insider trades. The authors document that US corporate insiders anchor on the 52-week low (high) for stock purchases (sales). They then find that insider trades made when stock prices are far from their anchor levels are more informative, suggesting that when insiders trade against the anchoring bias, private information is providing the catalyst to overcome the bias. The authors further show that outside investors can reap sizeable abnormal returns by piggybacking on insiders who make these buy-high, sell-low trades.

Original languageEnglish (US)
Pages (from-to)139-151
Number of pages13
JournalJournal of Portfolio Management
Issue number1
StatePublished - Nov 2019

All Science Journal Classification (ASJC) codes

  • Accounting
  • General Business, Management and Accounting
  • Finance
  • Economics and Econometrics


  • TOPICS: Exchanges/markets/clearinghouses, information providers/credit ratings*


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