Journal article
Informed Trading by Advisor Banks: Evidence from Options Holdings
The Review of financial studies, v 32(2), pp 605-645
01 Feb 2019
Abstract
Strong conflicts of interest exist within investment banks: the investment banking division possesses substantial private information, and the asset management division seeks such information. This raises the question of whether the asset management division benefits from an information advantage on client firms. While prior examinations of advisor bank trading in client firms have focused on stocks and found mixed results, we argue that the options market represents a more attractive venue for such trading. We find significant evidence of advisor banks trading in client firm options ahead of merger announcements, but no evidence of similar trading in client firm stock.
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Details
- Title
- Informed Trading by Advisor Banks: Evidence from Options Holdings
- Creators
- Michelle Lowry - Drexel UniversityMarco Rossi - Mitchell InstituteZhongyan Zhu - Monash University
- Publication Details
- The Review of financial studies, v 32(2), pp 605-645
- Publisher
- Oxford Univ Press
- Number of pages
- 41
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Web of Science ID
- WOS:000469819200006
- Scopus ID
- 2-s2.0-85066950112
- Other Identifier
- 991019167747704721
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Business, Finance
- Economics