Strathprints logo
Strathprints Home | Open Access | Browse | Search | User area | Copyright | Help | Library Home | SUPrimo

Corporate usage of financial derivatives, information asymmetry and insider trading

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.

Full text not available in this repository. (Request a copy from the Strathclyde author)


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, Finance, Business, Management and Accounting(all), Economics and Econometrics, Accounting
Subjects: Social Sciences > Commerce > Accounting
Department: Strathclyde Business School > Accounting and Finance
Depositing user: Pure Administrator
Date Deposited: 11 Sep 2012 11:14
Last modified: 21 May 2015 14:55

Actions (login required)

View Item View Item