What types of investors generate the two-phase phenomenon?

We examine the two-phase phenomenon described by Plerou, Gopikrishnan, and Stanley (2003)  [1] in the KOSPI 200 options market, one of the most liquid options markets in the world. By analysing a unique intraday dataset that contains information about investor type for each trade and quote, we find that the two-phase phenomenon is generated primarily by domestic individual investors, who are generally considered to be uninformed and noisy traders. In contrast, our empirical results indicate that trades by foreign institutions, who are generally considered informed and sophisticated investors, do not exhibit two-phase behaviour.