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Private information in executive stock option trades: evidence of insider trading in the UK

Kyriacou, Kyriacos, Luintel, Kul and Mase, Bryan 2010. Private information in executive stock option trades: evidence of insider trading in the UK. Economica 77 (308) , pp. 751-774. 10.1111/j.1468-0335.2009.00775.x

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Abstract

UK executives' stock option exercises and associated sell decisions are motivated by private, inside, information. Executives use their inside information to lock in short-term gains, and to sell stock acquired prior to negative abnormal stock returns. This informed trading is robust to the alternative factors that might motivate the exercise of executive stock options, including option moneyness and value of exercise. We suggest that the disparity in informed trading between US and UK executives' option trades is related to important differences in the proportion of executive remuneration linked to options, the regulation of options, and the taxation of option gains.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HF Commerce
H Social Sciences > HG Finance
Publisher: Wiley Blackwell
ISSN: 0013-0427
Last Modified: 04 Jun 2017 03:20
URI: http://orca.cardiff.ac.uk/id/eprint/19861

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