Research On Insider's Behavior Under The Impact Of Institutional Traders

Insider trading is a kind of illegal behavior based on information asymmetry,it interferes with the normal order of the stock market,damage the interests of other investors and the principle of "fair and open".Furthermore,it may even distort the market price and the function of resource allocation.In view of the harmfulness of insider trading,the Chinese government formulated a number of provisions to defend against insider trading,but the environment is complicated,so it is difficult to quickly detect the occurrence of insider trading and specific behavior.Therefore,this article mainly considers the actors inside to find the factors that affect the behavior of insider trading,especially the relationship of insiders and institutional traders.Firstly,this paper reviews the relationship between insider traders and institutional traders,and introduces the definition and present situation of insider traders and institutional traders in detail.The results show that the relationship between insider traders and institutional traders is complex,and there is no uniform conclusion.Based on this,we discuss the interaction between two kinds of investor.Secondly,this paper tries to find related actors inside the market who influence insiders.We suppose that actors could be divided into insider traders,institutional traders and noise traders,andestablish a model belong to the theoryof microstructure in finance first used by Kyle to research on the trading strategy and profit of all kinds of elements.In the conclusion,it shows that the influence of institutional traders on insider trading behavior is complex.When institutional traders' capabilitiesof detecting information is low,they does not impact insiders' behavior,but when they could detect information sensitively,they can inhibit thebehaviorof insider.More than that,noise traders directly stimulate the behavior of insider traders.Thirdly,in order to support the theoretical model,we use the high frequency data of insider trading stocks released by the Securities Regulatory Commission to conduct an empirical analysis.Firstwe previouslyassumed trading as an important medium for transmitting information,through the research of nonlinear ACD model,we find that the trading volume is indeed an effective carrier of information,and also find that the higher strength oftransaction mightinduced by insider trading when trading volume is also high.Secondly,this paper uses the variance decomposition model to analyze the change ofinformation before and after the announcement,and proves the conclusion of theoretical study.