Der Effekt des Wetters auf das Handelsverhalten privater Anleger

2012 February 06

Jours fixes take place on the first monday of the month, starting at 5:00 p.m., in the "Deutsche Bank" lecture room of the House of Finance (Campus Westend).

[Steffen Meyer, E-Finance Lab]

This paper is the first to document a robust connection between weather conditions and the trading of retail investors. Consistent with psychological evidence for a positive impact of pleasant weather on people’s mood, we find that investor sentiment as measured by purchases relative to sales is significantly better on days with higher temperatures and air pressure. Also in line with this, cloud cover (roughly the inverse of sunshine) has a negative effect on purchases relative to sales when measured at the individual investor level. With trading data aggregated to the weather station level, cloud cover is either insignificant or has the wrong sign. In addition to weather affecting sentiment, we find strong evidence for a relation between weather and overall trading volume. On days with bad weather (colder, cloudier, and lower air pressure than expected) retail investors trade less both, in terms of the number of trades and the volume in Euros. This is consistent with retail investors incurring an opportunity cost for spending time on trading on days with pleasant weather.