options by anticipated spikes in volatility. Using data on options trades by clientele groups, we show retail investors … abnormal volatility. In doing so, retail investors engage in a trio of wealth-depleting behaviors: they overpay for options … relative to realized volatility, incur enormous bid-ask spreads, and are slow to respond to predictable post …

trading around quarterly earnings announcements is either directionally motivated and/or volatility motivated. We found … volatility-motivated option trading, and our results suggest that this type of option trading could be motivated by hedging …