Investors in the Taiwanese warrant markets were investigated to examine the existence of the disposition effect to sell winners too early and hold losers too long. Empirical results indicate that: first, both the disposition effect and house money effect exist in the Taiwanese warrant market. Secondly, the issuance price of a warrant is the predominant reference for investors to make strategic decisions. Furthermore, subloser investors are more concerned with the new high more than with the new low when they make a strategic decision. In the end, warrants with different issuance prices, warrants with different returns, and warrants with different market prices were found to exhibit the differentiated disposition behavior.
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Chih‐Hsiang Chang (2008) studied this question.