Three essays on investors' trading motivation

Abstract

This thesis provides a comprehensive analysis of (institutional) investors' trading motivation and its impacts on financial markets including the stock and options markets. The first chapter investigates the potential for informed investors' price manipulation with options prior to seasoned equity offerings (SEOs). To the extant, the second chapter provides evidence on informed trading in the options market prior to SEOs and its heterogeneous return predictability over different investment horizon with respect to options' time-to-expiration. Finally, the third chapter identifies the heterogeneity among short-term institutional investors by fund concentration, one who contributes to market informativeness and the other who herds and erodes market stability. This thesis is expected to contribute to understanding the role of (institutional) investors in financial markets, especially, of which multi-market trading is available around the important corporate event.