Funding liquidity boosts market liquidity in index options, study finds.
The study looked at how the amount of money available for trading affects how easy it is to buy and sell options on the S&P 500 index. They found that when there is more money available for trading, it is easier to buy and sell options. This is especially true for short-term and deep out-of-the-money options. The results were consistent even after considering other factors like the stock market and how often data was collected.