Changes in the Insider Trading Scene During the Covid-19 Pandemic : A Comparative Study of Insider Trading Behaviour Before and During Covid-19

Sammanfattning

This thesis examines if insider traders have performed better during a working from home setting imposed by the Covid-19 pandemic during 2020-2021. Building on previous work from (Cohen, Malloy, & Pomorski, 2012), we identify trades as routine or non-routine. We find that non-routine trades on a 30-day basis on average outperform the market by 76 basis points when controlling for the effects of being in the industrial sector, and by 166 basis points when controlling for the effects of being in the information technology sector. Adding the aspect of WFH conditions in the market, the trades yield on average a 129 and 131 basis points higher return, depending on which industry is controlled for. We show that trades from the WFH period are indicative of higher abnormal returns, but we find no evidence to suggest that these differences can be attributed to that of non-routine insider trades.