Trading Activity in Options and Stock Around Price-Sensitive News Announcements

This study investigates the trading activity in options and stock markets around informed events with extreme daily stock price movements. We find that informed agents are more likely to trade options prior to negative news and stocks ahead of positive news. We also show that optioned stocks overreact to the arrival of negative news, but react efficiently to positive news. However, the overreaction patterns are unique to the subsample of stocks with the lowest pre-event abnormal option/stock volume ratio (O/S). This finding suggests that the incremental benefit of option listing is related to the level of option trading activity, over and beyond the presence of an options market on the firm's stock. Finally, we find that the pre-event abnormal O/S is a better predictor of stock price patterns following a negative shock than is the pre-event O/S, implying that the former may contain more information about the future value of stocks than the latter.

Ca2+- and volume-sensitive chloride currents are differentially regulated by agonists and store-operated Ca2+ entry.

Using patch-clamp and calcium imaging techniques, we characterized the effects of ATP and histamine on human keratinocytes. In the HaCaT cell line, both receptor agonists induced a transient elevation of [Ca2+]i in a Ca2+-free medium followed by a secondary [Ca2+]i rise upon Ca2+ readmission due to store-operated calcium entry (SOCE). In voltage-clamped cells, agonists activated two kinetically distinct currents, which showed differing voltage dependences and were identified as Ca2+-activated (ICl(Ca)) and volume-regulated (ICl, swell) chloride currents. NPPB and DIDS more efficiently inhibited ICl(Ca) and ICl, swell, respectively. Cell swelling caused by hypotonic solution invariably activated ICl, swell while regulatory volume decrease occurred in intact cells, as was found in flow cytometry experiments. The PLC inhibitor U-73122 blocked both agonist- and cell swelling–induced ICl, swell, while its inactive analogue U-73343 had no effect. ICl(Ca) could be activated by cytoplasmic calcium increase due to thapsigargin (TG)-induced SOCE as well as by buffering [Ca2+]i in the pipette solution at 500 nM. In contrast, ICl, swell could be directly activated by 1-oleoyl-2-acetyl-sn-glycerol (OAG), a cell-permeable DAG analogue, but neither by InsP3 infusion nor by the cytoplasmic calcium increase. PKC also had no role in its regulation. Agonists, OAG, and cell swelling induced ICl, swell in a nonadditive manner, suggesting their convergence on a common pathway. ICl, swell and ICl(Ca) showed only a limited overlap (i.e., simultaneous activation), although various maneuvers were able to induce these currents sequentially in the same cell. TG-induced SOCE strongly potentiated ICl(Ca), but abolished ICl, swell, thereby providing a clue for this paradox. Thus, we have established for the first time using a keratinocyte model that ICl, swell can be physiologically activated under isotonic conditions by receptors coupled to the phosphoinositide pathway. These results also suggest a novel function for SOCE, which can operate as a "selection" switch between closely localized channels.

The Trading of Unlimited Liability Bank Shares in Nineteenth Century Ireland: The Bagehot Hypothesis

In the mid-1820s, banks became the first businesses in Great Britain and Ireland to be allowed to form freely on an unlimited liability joint-stock basis. Walter Bagehot warned that their shares would ultimately be owned by widows, orphans, and other impecunious individuals. Another hypothesis is that the governing bodies of these banks, constrained by special legal restrictions on share trading, acted effectively to prevent such shares being transferred to the less wealthy. We test both conjectures using the archives of an Irish joint-stock bank. The results do not support Bagehot's hypothesis.