Informed trading strategy guarantees profits in electronic and financial futures markets!
The study explores how insider trading information can be used to create a profitable trading strategy for day traders. By analyzing high-frequency data from Electronic Sector Index futures and Financial Sector index futures, the researchers developed a day-trading strategy that capitalizes on informed trading behavior. They found that regardless of the index traded, profits could be made using this strategy. Additionally, the strategy was found to be more effective in futures markets with higher volatility.