Government ownership, informed trading, and private information

We investigate the nature and extent of information asymmetry among traders in companies with government ownership. Consistent with a less transparent information environment, we find relatively less informed trading in the shares of firms with government presence, and specifically, fewer informed trades related to the skilled analysis of public information. At the same time, we also find that firms with government presence have a significantly higher proportion of informed trading that arises from explicitly private information, consistent with the literature on the self-serving influence of government stakeholders not necessarily committed to maximizing firm value

Hide-and-Seek in the Market: Placing and Detecting Hidden Orders

Hidden orders add an important dimension to traders' strategies. This paper investigates why traders hide their orders and how other traders respond to the detection of hidden depth, using Euronext data. Our findings suggest that traders use hidden quantity to manage exposure risk and to mitigate adverse selection costs. Market members are less likely to hide their limit orders. The paper also produces evidence that traders detect hidden depth and adapt their order placement strategy accordingly. When hidden depth is discovered on the opposite side of the market, order aggressiveness increases. When hidden depth is discovered on the same side of the market, principal orders are less aggressive while client order aggressiveness increases