The Effects of Derivatives on Asset Price Volatility: A Study on the Options Trading in the USA and UK
Journal: Journal of Asian Development Studies
Year: 2024

The impact of options trading on underlying asset prices in the United States and United Kingdom markets from 2010 to 2024 is the focus of this study. A multivariate GARCH model and Granger causality tests were used to analyze the relationship between options trading volume and price volatility of the underlying assets. Results indicated a significant bidirectional relationship between options trading activity and asset price volatility, with increased options volume generally associated with hi