High trading activity in single-stock futures market driven by key factors.
The study looked at why some single-stock futures markets are more successful than others. They found that factors like low institutional ownership, high trading volume and volatility, and mispricing between spot and futures markets attract investors. The size of the contract, tick size, and age of the contract also affect trading activity. Single-stock futures are more efficiently priced around dividend dates, which helps reduce taxes for investors. These findings are important for investors and regulators in the derivatives market.