Media type: E-Article Title: Informed Trading in the Options Market and Stock Return Predictability Contributor: Han, JoongHo; Kim, Da‐Hea; Byun, Suk‐Joon Published: Wiley, 2017 Published in: Journal of Futures Markets, 37 (2017) 11, Seite 1053-1093 Language: English DOI: 10.1002/fut.21837 ISSN: 0270-7314; 1096-9934 Keywords: Economics and Econometrics ; Finance ; General Business, Management and Accounting ; Accounting Origination: Footnote: Description: <jats:sec><jats:label /><jats:p>Previous research highlights the importance of two distinct types of informed trading in the options market: trading on the price direction of underlying stocks, and trading on their uncertainty. Surprisingly, however, the studies considering these in a unified framework are scant.This study attempts to fill the gap. We predict that when both <jats:italic>directional</jats:italic> and<jats:italic>volatility information</jats:italic> could motivateoptions trading, the return predictability of options volume hinges onthe shape of the volatility smirk.Consistent with this prediction, we find thatthe negative relationship between options volume and future stock returns is concentrated in stocks exhibiting steep volatility smirks. © 2017 Wiley Periodicals, Inc. Jrl Fut Mark 37:1053–1093, 2017</jats:p></jats:sec>