The Impact Of Options Listing Upon The Optimistic Bias In Analysts Quarterly Earnings Forecasts

Abstract

We provide evidence that firms options listing increases the divergence of analysts opinions and, at the same time, leads to a reduction in the systematic optimistic bias in an important element of the market expectation of earnings, analysts consensus earnings forecasts. Our contribution is added insight into how the increased divergence of analysts opinions following options listing drives a reduction of systematic optimistic bias in consensus analysts forecasts.