Nines in the Endings of Stock Prices
Preprint
- 1 January 2006
- preprint
- Published by Elsevier BV in SSRN Electronic Journal
Abstract
In this paper, we ask whether investors' responses to nines in the rightmost digits of stock prices are similar to consumers' responses to nines in the rightmost digits of retail prices. In contrast to the increase in demand that is often observed for 9-ending retail prices, excessive overnight selling tends to follow stocks that close on 9-ending prices. Additional analysis indicates this may be due to a resistance level created by round-dollar stock prices. This finding sheds light on alterative explanations offered for the clustering of ending digits in prices and may provide guidance on how to expand or adjust the maximizing explanations for the phenomenon.This publication has 39 references indexed in Scilit:
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