Traders Stop Trading When World Cup Soccer Is Happening

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Written By Chris Azzopardi

…or they slow down at least. According to a paper by two European Central Bank economists, volatile markets calm considerably during the World Cup, and particularly when the national team of a market is playing. Forty-five percent on average.

During the 2010 World Cup in South Africa, equity trades plunged an average of 45% at stock markets when the national team was playing, according to a new paper by a pair of ECB economists.

A goal reduced trading another 5%. Trading already tapered off even before the match starts, and stayed slow during halftime.

“Overall, there is a strong sense that stock markets were following developments on the soccer pitch rather than in the trading pit,” ECB economist Michael Ehrmann and David-Jan Jansen of the Dutch central bank wrote.

And yes, the decrease in activity happened even in the United States, which, everyone knows, hates soccer and doesn’t care at all about their national team and so why would their market slow down at all. Sorry. I’m annoyed.

Because of this.

“Often, the United States is not perceived as being enthusiastic about soccer. At the same time, investors in the U. S. markets often have an international background, which might explain the rather strong effects,” the authors wrote.

Right. It’s just those international investors. Because Americans couldn’t possibly care about the World Cup. Even though the numbers show a 40% decrease in activity when the USMNT plays, which makes almost no sense if the slow in trading is mostly down to international investors.

Excuse me. I need to put my head through some drywall.

Source: WSJ.com

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