Option Introduction and Liquidity Changes in the OTC/NASDAQ Equity Market

This paper examines the impact of option listing in the NASDAQ equity market on the bid-ask spread of the underlying stock. We find that both the market adjusted percentage and dollar spreads decrease with option listing, which is consistent with a value enhancing impact of derivative security introduction.

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Year of publication:	1992
Authors:	Fortin, Rich ; Maese, Judy
Published in:	Journal of Entrepreneurial Finance. - Graziado School of Business and Management. - Vol. 2.1992, 1, p. 39-52
Publisher:	Graziado School of Business and Management
Subject:	NASDAQ \| Nasdaq \| Options \| OTC \| Liquidity

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Extent:	application/pdf
Type of publication:	Article
Classification:	G13 - Contingent Pricing; Futures Pricing ; G12 - Asset Pricing
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010790690