Financial Derivatives Instruments (Option and Embedded equity put option) and stock return synchronicity: Evidence from the Iran Capital Market

Subject Areas : Financial engineering

Ali Mehrnoosh ¹ ( Department of Accounting, Ghaemshahr Branch, Islamic Azad University, Ghaemshahr, Iran )
Ali jafari ² ( Department of Accounting, Ghaemshahr Branch, Islamic Azad University, Ghaemshahr, Iran )
Seyed Hossein Nasl Mousavi ³ ( Department of Accounting, Ghaemshahr Branch, Islamic Azad University, Ghaemshahr, Iran )

Received: 2021-07-17 Accepted : 2021-08-23 Published : 2021-12-22

Keywords: Stock Returns, Derivative Financial Instruments, Transaction Options, Subsidiary Options,

Abstract :

Introduction & Objective: One of the most important components of financial systems is derivative financial instruments (option to trade and option to sell). The first role of derivatives is to provide a cheap way to get higher returns and reduce risk. Therefore, the purpose of this study is to investigate the relationship between derivative financial instruments (option trading and subordinate selling options) and stock return synchronicity.Methods: This research is applied in terms of purpose and descriptive in terms of nature and method and correlation studies in terms of relationships between variables. In the present study, a total of 112 companies listed on the Tehran Stock Exchange that have offered derivative financial instruments (option and transaction option) have been examined for a period of 1392 to 1397. In order to test the research hypotheses, the multivariate regression model method - data panel method has been used.Findings: It is shown that the issuance of subordinated stock options and the issuance of stock options at stock return synchronicity