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THE EFFECT OF TRADED OPTION INTRODUCTION ON SHAREHOLDER WEALTH
Author(s) -
Kim Wi Saeng,
Young Colin M.
Publication year - 1991
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/j.1475-6803.1991.tb00652.x
Subject(s) - listing (finance) , shareholder , business , financial economics , asian option , put option , economics , finance , valuation of options , corporate governance
Several authors suggest that the opening of a market in traded options constitutes a “feasibility‐expanding” change. In this paper evidence on changes in the price of underlying stocks at the time of option listing is examined to determine whether option listing constitutes such a change. Evidence supports the hypothesis that call option listing is feasibility expanding, that put option listing is not feasibility expanding, and that call listings closer to the initiation of organized option trading have a larger impact relative to later listings.