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

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Listed:
  • Vacca, Matteo

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.

Suggested Citation

  • Vacca, Matteo, 2026. "Insider trading with options: Evidence from rank-and-file employees," Journal of Corporate Finance, Elsevier, vol. 98(C).
    • Handle: RePEc:eee:corfin:v:98:y:2026:i:c:s0929119926000210
    DOI: 10.1016/j.jcorpfin.2026.102963
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    Keywords

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    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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