We hypothesize that social trust affects the demand for lottery-like stocks which results in overpricing and lower expected return for these stocks. We show that the MAX effect only exists when firms are located in high social trust regions, supporting the positive relation between trust and investors' tendency to invest in risky assets. The effect of trust on the MAX effect is more pronounced when the region's education or income levels are lower, indicating that less educated or wealthy people possess less reliable information and rely more on trust in making economic or financial decisions. Our results are robust to using other proxies for lottery stocks and several robustness tests. Our findings provide a better understanding of the impact of trust on speculative behavior that can guide initiatives to promote more stable investment environments and avoid potential market distortions.