Disposition Effect and Induce Transaction in Future Market Based on Prospect Theory

摘要

Futures brokers' income is mainly based on poundage, which easily lead to induce investors do unnecessary transactions. Disposition effect exist In future market commonly. We construct a prospect theory investment decision model with induce transaction, to explore the relationship between Induce transactions and disposition effect. The results show that there is disposition effect and induce transaction in China's futures market. The investors are conducted by intermediaries and IB broker, who do more unnecessary transactions than the investors conduct by staff. Induced transaction not only accelerates the investors to realize winners, but also hold the losses longer, but the impact on the two is asymmetrical, which has a more significant impact on the winners. The relationship between the induced transaction and the disposal effect is not linear, appropriate induce transaction reduce disposition effect, but excessive will increase the disposition effect of the futures market.