Informed trading around earnings announcements—Spot,futures, or options?

Recent literature reports higher single stock options (SSO) volume before earnings announcements (EA). There are no studies that explore single stock futures (SSF) in this context because of illiquid SSF markets in developed countries. Similar to SSO, SSF provide embedded leverage and facilitate short selling although at a lower cost, but do not provide downside-risk protection. India’s liquid SSO and SSF provide a unique setting to study the preference of informed traders. We observe an increase in both SSO and SSF volume before EA. Further, SSF dominate SSO possibly due to SSO becoming expensive before EA and higher information leakage in India.     

Striker Replacements in the United States,Canada, and Mexico: A Review of the Law and Empirical Research A Review of the Law andEmpirical Research

The debate on striker replacements is marked by considerable passion and controversy, with many unions and workers' rights advocates proposing legal prohibitions and employers and “free market” advocates generally opposing such prohibitions. In this article we go beyond the rhetoric and examine the nature and extent of striker replacement laws across North America. We also examine the research evidence on this issue and make suggestions for future research.     

Fails‐to‐Deliver before and after the Implementation of Rule 203 and Rule 204

We study the determinants of fails‐to‐deliver in the period before and after the implementation of Rule 203 (elimination of option market maker exception from the locate and close‐out requirement) and Rule 204 (t+3 close‐out rule) in September 2008. We find a positive relation between short selling and fails‐to‐deliver that weakens after the implementation of these rules. Fails‐to‐deliver are higher for stocks with low institutional ownership, low book‐to‐market, small market capitalization, high turnover, and put option availability. The relation between short selling and these measures of borrowing costs is also weaker after the implementation of these rules.     

A framework for strategic industrial pricing

A model for pricing decision making in an industrial setting is described. Written from the perspective of a price setter, the model starts with an evaluation of the relative strengths and weaknesses of both buyer and seller. These evaluations are then input into a strategic framework, which integrates tactical considerations with several environmental concerns. The article concludes with a set of strategic pricing alternatives, in a matrix form, to be used by price negotiators and pricing executives of industrial companies.     

Socioeconomic and demographic analysis of occupational patterns in Delhi slums, India

Slums are a major concern for the contemporary urban planners, especially in the developing world. They typically represent an imbalance between migration into cities and economic growth of the city. For a long time, governments have tried to improve the quality of life for the slum dwellers, with varying degree of success. Such efforts understate the need to continually understand various aspects of the slum economics. This article is an attempt to comprehend the socio-demographic and economic patterns of the population in slums of Delhi, India. The study employs the use of field survey technique comprising of questions that tapped the education level, income, gender and occupational status of the respondents. The sample consisted of 5053 participants and further classified as working and non-working population. On the basis of the survey, the occupational patterns are analyzed and classified at three different levels （macro, meso and micro）. The study reveals high degree of positive correlation between the education level, economic status and gender parity in the slums.     

Payout initiation by IPO firms: The choice between dividends and share repurchases

This study evaluates the economics of the choice of form of payout initiation mechanism adopted by IPO firms. Our results suggest that IPO firms demonstrate a preference for repurchases over dividends as the specific form of payout initiation mechanism. We however, find that while the market views post-IPO payout initiations favorably, it is indifferent to the specific form of payout mechanism adopted. Further, we find that dividends and repurchases represent distinct payout mechanisms adopted by IPO firms with fundamentally different characteristics and motivation to initiate payouts during the post-IPO phase. Our results suggest that while dividend initiations are primarily driven by life cycle and catering theory considerations, signaling theory provides the more likely explanation for payout initiations through share repurchases.     

Exploring the manipulation toolkit: the failure of Doral Financial Corporation

The 2015 bankruptcy of Doral Financial Corporation, once ‘the best’ U.S. bank according to U.S. Banker, is the largest since April 2010. The bankruptcy concludes years of management manipulation and efforts to recover. SEC investigation revealed fraud related to Doral’s valuation of interest only strips (IOs). We show that Doral management’s misconduct also includes reckless hiring, over investing, insiders trading, and opportunistic stock splits. Investigating the full range of Doral management’s misconduct reveals new tactics that managers use to pool with good firms and aids our understanding of the economic impact of managerial misconduct.     

Order dynamics: Recent evidence from the NYSE

We examine investor order choices using evidence from a recent period when the NYSE trades in decimals and allows automatic executions. We analyze the decision to submit or cancel an order or to take no action. For submitted orders, we distinguish order type (market vs. limit), order side (buy vs. sell), execution method (auction vs. automatic), and pricing aggressiveness. We find that the NYSE exhibits positive serial correlation in order type on an order-by-order basis, which suggests that follow-on order strategies dominate adverse selection or liquidity considerations at a moment in time. Aggregated levels of order flow also exhibit positive serial correlation in order type, but appear to be non-stationary processes. Overall, changes in aggregated order flow have an order-type serial correlation that is close to zero at short aggregation intervals, but becomes increasingly negative at longer intervals. This implies a liquidity exhaustion–replenishment cycle. We find that small orders routed to the NYSE's floor auction process are sensitive to the quoted spread, but that small orders routed to the automatic execution system are not. Thus, in addition to foregoing price improvement, traders selecting the speed of automatic executions on the NYSE do so with little regard for the quoted cost of immediacy. As quoted depth increases, traders respond by competing on price via limit orders that undercut existing bid and ask prices. Limit orders are more likely and market sells are less likely late in the trading day. These results are helpful in understanding the order arrival process at the NYSE and have potential applications in academics and industry for optimizing order submission strategies.     

Cross-sectional association between abnormal returns and firm specific variables

Abnormal returns (market model prediction errors) are the subject of many event studies in accounting and finance literature. Conditional on the event of interest, researchers have recently used cross-sectional regressions to examine relations between abnormal returns and firm specific variables. This paper demostrates that non-constant variences and covariances in market model residuals across firms introduced bias in the estimated slope coefficients of the independent variables, i.e., the expected signs of the estimated slope coefficients can be predicted a priori. A method is develope to removed the bias in the estimated slope coefficiets and is found to be effective. This method explicitly takes the dependence among abnormal returns across firms into account. Methods that assume abnormal returns across firms to be independent do not control for such bias.     

The evolution of strategic marketing

This article examines the evolution of the concept of strategic marketing. Strategic marketing does not replace traditional marketing management. Rather it adds new dimensions to the field of marketing, enhancing its role in the determination of corporate strategy.