QUEEN’S BUSINESS SCHOOL FINANCE SEMINAR SERIES

Wednesday 23^rd October

1pm

“Analyst Tipping: New Evidence from Directional Options Trading Volume and FINRA Rule 2241”

Abstract:

We study the predictive information content of directional options trading volume for stock returns following analyst recommendations. We observe that options volume related to open buy positions is particularly informative immediately before the announcement day, in line with the prevailing tipping hypothesis. Moreover, following the implementation of FINRA Rule 2241 in December 2015, aimed at curtailing tipping practices, our difference-indifferences approach reveals the curbing of analyst tipping in subsequent years. Our findings remain robust across sub-samples, additional tests, and after accounting for several control variables.

Dr Mattia Bevilacqua

University of Liverpool

QBS Conference Hub, Seminar Room 01.012