Tsinghua PBCSF Seminar (Nov. 8, 2023): Vivian Fang, Professor of Finance, Indiana University: Fractional Trading

Time: 2023-11-01 09:59 Print

Topic: Fractional Trading

Speaker: Vivian Fang, Professor of Finance and the Richard E. Jacobs Chair in Finance, Indiana University Kelley School of Business

Time: 10:00am-11:30am, November 8

Location: 4-101


Fractional trading (FT)—the ability to trade less than a whole share—removes barriers to high-priced stocks and facilitates entry by capital-constrained retail investors. We observe a surge of tiny trades, measured using off-exchange one-share trades, among high-priced stocks compared to low-priced stocks after FT is introduced to the U.S. equity markets. These tiny trades, when coordinated during attention-grabbing events, are forceful enough to exert large price pressure on high-priced stocks. Further evidence suggests that FT can even fuel meme stock-like trading frenzies and bubbles in highpriced stocks, for which feedback effect likely plays a role.

Speaker Biography:

Vivian Fang is a Professor of Finance and the Richard E. Jacobs Chair in Finance at the Kelley School of Business. Vivian’s research lies at the intersection of corporate finance and financial accounting. Her work has appeared in top finance and accounting journals and has been featured in various media outlets, including Bloomberg, CNBC, Economist, Financial Times, Forbes, Harvard Business Review, Washington Post, and Wall Street Journal. Her research has won several international research awards, including a WFA Best Paper Award in 2015, the IRRC Institute Research Award in 2017, and the 2017 ICPM Research Award. She is a research member of ECGI and serves on the editorial board of Management Science, Journal of Financial and Quantitative Analysis, and Contemporary Accounting Research. Vivian is an enthusiast about crypto education and an expert on crypto accounting. Her comments on crypto-related issues frequently appear on local and national media.