Original article History of Economic Thought, Methodology, and Heterodox Approaches

COPYTRADING, A NEW PHENOMENON: COMPARATIVE ECONOMIC AND LEGAL OVERVIEW

Fabiana Fragnito - Ph.D. student at the University of Molise
Received: 17 Oct 2023
Revised:
Published:
Downloads: 0
Citations: 0
Issue 4/2023
JEL G11 K29 G19 M15
DOI https://doi.org/10.56497/etj2368404

Abstract

The author focuses on the new phenomenon of copytrading, starting from a thorough knowledge of online financial trading tools. As more and more individuals have ventured into the online trade of financial instruments through new technologies and the Internet, trading has become accessible to anyone. It will be shown that operating within financial markets is not easy in the light of a series of economic techniques developed by experts in the field. This paper aims to provide an overview of the evolution of markets and therefore how the advent of the Internet and the creation of an extremely connected society is influencing the world of the stock exchange, changing actors and methods. It will especially explore the role and weight of today’s social networks in the financial markets and how, through their integration in stock exchange environments, a new trading system has developed that is increasingly open to all kinds of "investors" – recalling, for example, some start-ups engaged in a real process of "democratizing finance", thanks to their low costs and easy accessibility, like eToro. On one hand, the paper’s objective is the interdisciplinary nature of this phenomenon: economic profiles which explain its functioning and the legal consequences it generates, imposing organic regulation. The other objective relates to inexperienced traders being able to make investment choices with diligence and conscience; the paper will outline some traits of the regulatory regulation of online trading with a view to a comparison between the Italian and Bulgarian systems.

How to cite this article

Fragnito, F. (2023). Copytrading, a New Phenomenon: Comparative Economic and Legal Overview. Economic Thought Journal, 68 (4), 431-445. https://doi.org/10.56497/etj2368404

References

Annunziata, F. (2017). La disciplina del mercato mobiliare. Torino.

Apesteguia, J., Oechssler, J., and Weidenholzer, S. (2020). Copy trading. Management Science, Vol. 66 (12), 5608-5622. Available at https://econpapers.repec.org/article/inmormnsc/v_3a66_3ay_3a12_3ai_3a2020_3ap_3a5608-5622.htm/.

Bruno, M. G. (2021). Social Trading: Evoluzione – Dinamiche – Comportamenti. (graduate thesis). Università LUISS. Available at http://tesi.luiss.it/30652/.

Capriglione, F. (2012). Globalization, Financial Crisis and Markets: Reality to Be Considering. Napoli. Available at https://ssrn.com/abstract/ 2273411/.

Caruso, F., Landolfi, A., Lengua, A., Malverti, E., Mazziero, M., Sartorelli, E., Serafini, P., Stellato, L. (2012). I consigli dei grandi trader. Le strategie operative degli investitori professionali. Milan.

Chuen Lee, D. K. (2015). Emergence of Fintech and the LASIC Principle. Available at https://www.academia.edu/24827026/Emergence_of_FinTech_and_the_LASIC_principles/.

CRA International. (2006). Potential cost savings in a fully integrated European investment fund market. Brussels.

Dapp, F., T. (2014). The digital (r)evolution in the financial sector. Frankfurt am Main, Germany: Deutsche Bank AG.

Della Negra, F. (2020). I rimedi per la violazione di regole di condotta MIFID II: una riflessione di diritto UE. Banca Borsa Titoli di Credito Review, Vol. 5, 700. Available at https://www.iusimpresa.com/risultati.php?anno=2020&numero=5&id_rivista=1/.

Di Ciommo, F. (2017). La consulenza finanziaria alla luce della MiFID 2: profili giuridici. Rivista trimestrale di diritto dell’economia, Vol 1. Available at https://iris.luiss.it/handle/11385/173582?mode=full.787/.

Doering, P., Neumann, S., Paul, S. (2015). A Primer on Social Trading Networks – Institutional Aspects and Empirical Evidence. Available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2291421/.

Fabris, L. (2016). Il trading online di strumenti finanziari (graduate thesis). Università C’a Foscari di Venezia. Available at http://dspace.unive.it/handle/10579/9361/.

Galassi, T. (2022). Role and duties of intermediaries and financial advisors (graduate thesis). Università Politecnica delle Marche. Available at https://tesi.univpm.it/handle/20.500.12075/9816/.

Kacperczyk, M., Nieuwerburgh, S. N., Veldkamp, L. (2014). Time‐varying fund manager skill. The Journal of Finance, Vol. 69 (4), 1455-1484.

Liu, Y. Y., Nacher, J. C., Ochiai, T., Martino, M., and Altshuler, Y. (2014). Prospect Theory for Online Financial Trading. PLOS One, Vol. 9 (10). Available at http://hdl.handle.net/1721.1/92479/.

Maggiolo, M. (1996). Il contratto predisposto. Padova. Available at https://www.research.unipd.it/handle/11577/167269/.

Minev, S. (2003). Delta Trading: Platform for direct trading of currency and stocks over the Internet. Sofia: Siela. [Минев, С. (2003). Делта Трейдинг: Платформа за директна търговия с валута и акции през интернет. София: Сиела] (in Bulgarian).

Minev, S. (2003). How to trade the financial markets. Sofia: Siela. [Минев, С. (2003а). Как да търгуваме на финансовите пазари. София: Сиела] (in Bulgarian).

Murphy, J. (2001). Technical analysis of the financial markets: a comprehensive guide to trading methods and applications. New York Institute of Finance. Available at https://pdfroom.com/books/technical-analysis-of-the-financial-markets-a-comprehensive-guide-to-trading-methods-and-applications-new-york-institute-of-finance/9zk2AKlWdPJ/.

Oh, C., Sheng, O. R. L. (2011). Investigating Predictive Power of Stock Micro Blog Sentiment in Forecasting Future Stock Price Directional Movement. International Conference on Interaction Science. Available at https://www.semanticscholar.org/paper/Investigating-Predictive-Power-of-Stock-Micro-Blog-OhSheng/5302349b32848a33f3593b381dc632e7fd000ae5/.

Pellens, B., Schmidt, A. (2014). Behavior and preferences of German shareholders: a survey of private and institutional investors on information behavior, dividend preferences and the exercise of voting rights. Frankfurt am Main, Germany: Deutsches Aktieninstitut e.V. [Pellens, B., Schmidt, A. (2014). Verhalten und Präferenzen deutscher Aktionäre – Eine Befragung von privaten und institutionellen Anlegern zum Informationsverhalten, zur Dividendenpräferenz und zur Wahrnehmung von Stimmrechten. Frankfurt am Main, Germany: Deutsches Aktieninstitut e.V] (in German).

Pentland, A. S. (2013). Beyond the Echo Chamber. Harvard Business Review. Available at https://hbr.org/2013/11/beyond-the-echo-chamber/.

Rabitti, M. (2020) Prodotti finanziari tra regole di condotta e di organizzazione. I limiti di MiFID II. Diritto bancario Review, 145-177. Available at https://iris.uniroma3.it/handle/11590/385812/.

Rosenbloom, C. (2014). Guida al trading. Strategie operative e tecniche d’intervento nei mercati finanziari. Hoepli. Available at https://www.financialtradeitalia.com/wp-content/uploads/2021/04/Corey-Rosenbloom-Guida-completa-al-trading-Strategie-operative-e-tecniche-dintervento-nei-mercati-finanziari.pdf/.

Sprenger, O., T. (2014, Nov. 1st). Tweets and Trades: The Information Content of Stock Microblogs. Available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1702854/.

Troiano, V. and Motroni, R. (2016). La MiFID II, Rapporti con la clientela – governance – mercati. Padova: Wolters Kluwer – CEDAM. Available at https://iris.uniss.it/handle/11388/145755/.

Wälti, S. (2012). Trust no more? The impact of the crisis on citizens’ trust in central banks. Journal of International Money and Finance, Vol. 31 (3), 593-605. Available at https://www.sciencedirect.com/science/article/abs/pii/S0261560611001756/.

Wohlgemuth, V., Berger E. S. C., Wenzel, M. (2016). More than just financial performance: Trusting investors in social trading. Journal of Business Research, Vol. 69 (11), 4970-4974. Available at https://econpapers.repec.org/article/eeejbrese/v_3a69_3ay_3a2016_3ai_3a11_3ap_3a4970-4974.htm/.

Ziobrowska, J. (2021). Social trading as an alternative form of investing for non-professional investors. Journal internetowy Kwartalnik Antymonopolowy i Regulacyjny, 10 (6), 38-48. [Ziobrowska, J. (2021). Handel społecznościowy jako alternatywna forma inwestowania dla nieprofesjonalnych inwestorów. Journal internetowy Kwartalnik Antymonopolowy i Regulacyjny, 10 (6), 38-48] (in Polish). Available at https://ikar.wz.uw.edu.pl/images/numery/ikar_6_10/iKAR_610-21_5JZiobrowska.pdf/.

How to publish

Are you an author? Please read our publishing terms first.

Learn