Informed Trading by Advisor Banks? A look at options holdings ahead of mergers
- đ¤ Speaker: Professor Michelle Lowry, TD Bank Professor of Finance at the LeBow School of Business, Drexel University
- đ Date & Time: Tuesday 01 December 2015, 10:30 - 12:00
- đ Venue: Cambidge Judge Business School, W2.01
Abstract
Within an investment bank, there is a tension between the investment banking and asset management divisions: the former possesses substantial private information while the latter seeks information. Information is arguably impossible to completely safeguard, raising the possibility of leaks, either deliberate or inadvertent. To the extent that there is information leakage, we conjecture that it will be observed in the options market, as options represent a relatively cheap means to leverage private information. Empirical evidence is consistent with trading departments of the advisor banks having an information advantage, and leveraging this advantage through options rather than stock.
Series This talk is part of the Finance & Accounting Seminar Series series.
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Tuesday 01 December 2015, 10:30-12:00