Trades that are the result of either a reallocation of wealth or an implementation of an investment strategy that acts only on existing information. That is, an investor might sell a large block of stock -- not because they have information that leads them to think the stock will fall in value -- but because they might need the cash for some other investment.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Trades made without regard to information available on the securities being traded. Informationless trades occur primarily when an investor wishes to change his/her investment goals or simply implement them differently. A common example of an informationless trade is the sale of a stock because the investor may wish to use the proceeds from the sale for other investments, rather than out of any concern about the stock itself.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved