Competition without fungibility: Evidence from alternative market structures for derivatives

Pricing effects when competitors arrive: The case of discount certificates in Germany

“…For example, it offers an alternative way to investigate when and how issuers begin to adjust their prices to retail investors' demand. Fourth, although research rarely questions how competitors come into existence (e.g., Baule, 2011;Bartram and Fehle, 2007), the current study investigates the likelihood of receiving a duplicate issued by another issuer.…”

Investors with Too Many Options?

“…Issuers state in the prospectus that they continuously hedge their exposure by taking positions in the underlying assets. This does not mean, however, that covered warrants are free from issuer default risk as reported by Bartram and Fehle (2007). The prospectus also states that covered warrants are senior unsecured obligations of the issuer and thus subject to issuer default risk.…”

“…Bartram and Fehle (2007) and Ter Horst and Veld (2008) report substantial price deviations between bankissued options and comparable standardized options traded in Germany and the Netherlands. Wilkens et al (2003), Muck (2006), Ter Horst andVeld (2008), and Henderson and Pearson (2009) report deviations between market and model prices for bank-issued derivatives traded in Germany, the Netherland, and in the U.S., especially at the time of issue.…”

“…The DAX 30 Performance Index is the most popular underlying for warrants listed on the Euwax; Bartram and Fehle (2007) estimate that, in terms of Euwax trading volume in DAX options, the DAX would have ranked among the top five underlying assets on the Chicago Board Options Exchange (CBOE) during the sample period.…”

Empirical test of the efficiency of the UK covered warrants market: Stochastic dominance and likelihood ratio test approach

“…Researchers have also indicated that the introduction of covered warrants provides an alternative investment choice for market participants (Horst and Veld, 2008). In addition, covered warrants have gained in popularity among retail investors (Aitken and Segara, 2005;Bartram and Fehle, 2007). However, previous studies have predominantly focused on price differences between warrants and options.…”