Bradrania, R.Grant, A.Westerholm, P.J.Wu, W.2025-12-172025-12-172017Accounting and Finance, 2017; 57(4):981-10171467-629X1467-629Xhttps://hdl.handle.net/11541.2/116611We investigate the short-term relation between individual investor trading and stock returns on the Australian Securities Exchange. Stocks heavily bought by individual investors underperform stocks heavily sold over the subsequent three days, with respective returns on to a long–short portfolio of −93, −67 and −12 basis points on days one, two and three. Individuals underperform in small and mid-size stocks when they trade passively using limit orders waiting for the market price to move in their favour. Individuals underperform in large stocks when they trade aggressively using marketable orders. Foreign institutions gain from taking the opposite side of individual trades. We present an information asymmetry-based explanation for the findings.enCopyright 2015 AFAANZ Access Condition Notes: Accepted manuscript is available open accessindividual investorsinstitutional investorsinformation asymmetryliquidityJournal article10.1111/acfi.121802-s2.0-84947760003