2025, Vol. 6, Issue 2, Part A
Analyzing the role of behavioral finance in online trading decisions: Evidence from Zerodha
Author(s): Rohini Gupta
Abstract: Behavioral finance has emerged as a progressive field within the broader discipline of finance and investment, particularly gaining traction in the Indian context. Unlike the traditional financial theories that assume rationality in investor behavior, behavioral finance acknowledges the role of psychological and emotional influences on investment decisions. Historically, Indian investors have largely followed a conservative, risk-averse strategy, primarily focusing on safeguarding capital and ensuring stable returns. This traditional mindset emphasized caution, favoring investments only after significant market corrections or during low-price phases.
However, in recent years, a noticeable shift has occurred. Contemporary investors are increasingly exhibiting behavior that departs from conventional strategies. Many now demonstrate a willingness to engage in the market despite short-term volatility, driven by factors such as market sentiment, peer influence, overconfidence, and media exposure. This evolution underscores the growing relevance of behavioral finance in understanding the changing landscape of investment practices in India. In light of this shift, the present study aims to explore the behavioral patterns influencing investor decisions and their broader impact on stock market movements. This research is conducted in collaboration with Zerodha Limited, a leading stock brokerage firm headquartered in Bangalore. Zerodha provides a robust platform for observing real-time investor activity, as it hosts a vast and diverse user base actively participating in trading and investment. By leveraging data and insights from investors associated with Zerodha, the study seeks to analyze key behavioral tendencies such as herd behavior, loss aversion, overreaction, and risk tolerance. Understanding these psychological factors is essential for financial institutions, policymakers, and individual investors seeking to develop more informed, balanced, and rational investment strategies in an increasingly complex and dynamic financial environment.
DOI: 10.22271/27084515.2025.v6.i2a.612
Pages: 29-31 | Views: 750 | Downloads: 253
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How to cite this article:
Rohini Gupta. Analyzing the role of behavioral finance in online trading decisions: Evidence from Zerodha. Asian J Manage Commerce 2025;6(2):29-31. DOI: 10.22271/27084515.2025.v6.i2a.612
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