We test whether institutional investors' demand relates to past arbitrage activity in the form of short interest. We find that changes in short interest positively predict institutional demand. Examining the reason for the positive relationship, we find that institutions do not appear to demand...

The authors propose a strategy that utilizes trading information of both short sellers and corporate insiders. They find that the strategy earns statistically significant and economically meaningful risk-adjusted returns for at least one year, which stems mainly from the information asymmetry...

We examine whether stock-level options information drives mutual fund performance. Our paper is motivated by existing studies indicating that options prices or implied volatilities predict stock returns. We find that stock-implied volatility innovations forecast mutual fund performance....

We examine the dynamic relations between institutional ownership and a firm's capital structure. We find that a firm's leverage decreases when institutional ownership increases. This result implies that a firm reduces its debt level as institutional investors substitute for the monitoring role...