Cashing in on Managerial Malfeasance: A Trading Strategy Around Forecasted Executive Stock Option Grants
Posted: 16 Oct 2010
Date Written: October 14, 2010
Abstract
This study examined the profitability of a trading strategy that exploits the manipulation of stock prices around the grant date of executive stock options. The strategy generates annualized abnormal returns of 1.4–5.2 percent net of transaction costs and is relatively unaffected by the Sarbanes–Oxley Act of 2002.
Keywords: Equity Investments, Derivatives, Options Markets and Instruments, Option-Trading Strategies
Suggested Citation: Suggested Citation
Jansen, Ivo Ph. and Sanning, Lee W., Cashing in on Managerial Malfeasance: A Trading Strategy Around Forecasted Executive Stock Option Grants (October 14, 2010). Financial Analysts Journal, Vol. 66, No. 5, 2010, Available at SSRN: https://ssrn.com/abstract=1692304
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