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How ‘Trading Frenzies’ Affect the Real Economy
The recent rallies and volatility in the stocks of video game retailer GameStop and movie theater chain AMC can be linked to a term known as “frenzied trading,” according to Itay Goldstein, Wharton professor of finance and economics who co-authored a research paper in 2013 on that subject with Emre Ozdenoren, a professor of economics at London Business School, and Kathy Yuan, finance professor at the London School of Economics. In that paper, titled “Trading Frenzies and their Impact on Real Investment,” the authors provide a theory of what could generate a trading frenzy. “A group of small traders ... (full story)