Overconfidence and retail investors: case of a "kangaroo" market

In recent times, financial markets have undergone major changes. Availability of participating on trading activity on the market has increased thanks to zero-fee brokerages. New assets, cryptocurrencies, have become a mainstream invest- ment option. A global pandemic has brought uncertainty and large volatility. In this thesis, I aim to study how these new market conditions have affected presence of overconfidence during the period of early 2019 to early 2022. I explain in what forms can overconfidence patterns be observed in people and on financial markets. Then I test for presence of these patterns using four hypotheses. Findings of this thesis suggest that there is no significant differ- ence of overconfidence manifestation between stock data and cryptocurrency data. Results suggest that riskiness of assets affects how strongly are the pat- terns of overconfidence detected. Finally, different patterns of overconfidence are detected for different frequencies of data, suggesting connection between overconfidence and retail investors. JEL Classification G40, G12, C32 Keywords overconfidence, retail investors, cryptocurrency, trading Title Overconfidence and retail investors: the case of a 'kangaroo' marke