05.05.22 | Options Markets Dominate Price Discovery But Put:Call Ratios Low Predictive Accuracy

Study’s Key Findings:
• The options market dominates the price discovery process, with an average information leadership share of 67%.
• Trading volume and implied volatilities of calls versus puts differ markedly: trading volume is consistently higher for calls, and implied volatility is higher for puts.
• Put-call volume and implied volatility ratios are NOT good predictors of future returns.