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The investment preferences and behaviour of small investors in derivatives markets: A survey on derivative investments in Hong Kong
Author(s)
Date Issued
2013
Publisher
[India] : Globalbiz Research
ISSN
2306-367X
Citation
Journal of Emerging Issues in Economics, Finance and Banking, Apr 2013, vol. 1(4), pp. 341-361.
Description
Open access
19 pages
19 pages
Type
Peer Reviewed Journal Article
Abstract
This paper, using a survey, makes an attempt to investigate the investment preferences and
behaviour of small investors trading at the Hong Kong derivatives markets. The observation
period for the current survey covers the most turbulent period of the economic crisis of January
2011-January 2012 which happened in Hong Kong. The survey was conducted from 31st
January 2012 to 15th March 2012. A non-probability sampling method was applied to select individuals aged 18 and above from the investing population of Hong Kong. The results indicate that small investors mostly tend to trade Callable Bull/ Bear Contracts (35% of total) and warrants (23% of total). The results further indicate that 38% and 26% of the respondents respectively considered Internet and newspapers/TV/ magazines as the decisive factors which would affect their decisionmaking while investing in the financial derivatives. At the same time, about 45% respondents can be found in 10-30% portfolio weight in derivatives products irrespective of the fact whether they were influenced by Euro Zone Sovereign Debt crisis or not. This result unveiled that the small investors were interested in derivatives investments in Hong Kong. Finally, we focus on the online trading phenomenon in the derivatives markets. We found that ‘online trading’ was popular and had a noticeable trend, with 80% of the small investors participating in online trading.
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