Nguyen, H and Faff, Robert and Hodgson, Allan (2010) Corporate usage of financial derivatives, information asymmetry and insider trading. Journal of Futures Markets, 30 (1). pp. 25-47. ISSN 1096-9934
Full text not available in this repository. (Request a copy from the Strathclyde author)Abstract
This article investigates whether financial derivative usage by Australian corporations constitutes information asymmetry when proxied by profitable trading in the firms' securities by insiders. The findings show that insiders who trade in companies that employ derivatives make larger purchase returns compared to insiders in nonuser firms with regard to trading identity, trading intensity, variability of usage, volume of trading, and industry effects. A plausible explanation is that asymmetry is driven by derivative traders who undertake noisy transactions in firms where risk outcomes were previously transparent. Excess returns are confined to purchase transactions consistent with insiders primarily selling for noninformation reasons.
| Item type: | Article |
|---|---|
| ID code: | 41065 |
| Keywords: | insider trading, information asymmetry, financial derivatives, Accounting |
| Subjects: | Social Sciences > Commerce > Accounting |
| Department: | Strathclyde Business School > Accounting and Finance |
| Related URLs: | |
| Depositing user: | Pure Administrator |
| Date Deposited: | 11 Sep 2012 12:14 |
| Last modified: | 11 Sep 2012 12:14 |
| URI: | http://strathprints.strath.ac.uk/id/eprint/41065 |
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