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.
NASDAQ , Nasdaq , Options, OTC, Liquidity
Fortin, Rich and Maese, Judy
"Option Introduction and Liquidity Changes in the OTC/NASDAQ Equity Market,"
Journal of Small Business Finance:
1, pp. 39-52.
Available at: https://digitalcommons.pepperdine.edu/jef/vol2/iss1/4