Work

Insider trading with options: Evidence from rank-and-file employees

Year: 2026

Type: article

Abstract: Using trading data from Finland, I document that some rank-and-file employees purchase options written on their employers’ stocks. These purchases are associated with subsequent weekly excess returns of approximately 60 basis points in the underlying stocks. The association is most pronounced before earnings announcements, extends to firms in the employer’s supply chain, is not explained by industry knowledge or trading skill, and weakens upon job separation. The results suggest that some rank-and-file employees attempt to exploit informational advantages by trading in the option market, raising questions about firms’ disclosure policies and the alignment of employee incentives with market efficiency.

Source: Journal of Corporate Finance

DOI: 10.1016/j.jcorpfin.2026.102963

Author: Matteo Vacca

Institution: Hanken School of Economics

Language: English

Topic: Financial Markets and Investment Strategies

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $4,140