Abstract
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.
JEL Codes
G13, G12
Keywords
NASDAQ , Nasdaq , Options, OTC, Liquidity
Recommended Citation
Fortin, Rich and Maese, Judy
(1992)
"Option Introduction and Liquidity Changes in the OTC/NASDAQ Equity Market,"
Journal of Small Business Finance:
Vol. 2:
Iss.
1, pp. 39-52.
DOI: https://doi.org/10.57229/2373-1761.1131
Available at:
https://digitalcommons.pepperdine.edu/jef/vol2/iss1/4
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