What Makes Uninformed Traders Tick

Using New York Stock Exchange ticker subscriptions, we find that the dissemination of market prices by the stock ticker strengthens return predictability and momentum by stimulating uninformed trading. Variation in ticker subscriptions is not explained by population growth, economic growth, or market returns. Instead, lower operating costs for a stock ticker increase ticker subscriptions and strengthen momentum. Higher idiosyncratic return volatility and lower systematic risk are also associated with an increase in ticker subscriptions. Therefore, the dissemination of firm-level market prices induces a trade-off between price efficiency and systematic risk.