Abstract: Social interactions can provide investors with more information and influence their investment decisions through peer effect. Using social and trading data of Snowball, a representative social trading platform in China, this paper constructs four dimensions of social interactions, including social centrality, social release content, social engagement, and social attention. Then the impact of social interaction in different dimensions on the disposition effect of investors is explored. The results show that social interaction can significantly reduce the disposition effect of investors. More social interaction, especially during trading hours, reduces the disposition effect by increasing the proportion of losses realized. This paper gives the influencing dimensions and channels of the impact of social interaction on disposition effect, expanding the existing research on social interaction and disposition effect. Our findings are helpful for the government to carry out investor education from the perspective of social interaction. Promoting positive interactions among investors will be conducive not only to protecting the rights and interests of investors, but also to developing a better capital market.

Key words: social interaction, disposition effect, simulated trading, social trading platform