caa a22 4500 605451095 CHVBK 20210128100150.0 cr unu---uuuuu 210128e20150401xx s 000 0 eng 10.1007/s11147-014-9102-3 doi (NATIONALLICENCE)springer-10.1007/s11147-014-9102-3 Are put-call ratios a substitute for short sales? [Elektronische Daten] [Benjamin Blau, Tyler Brough] Prior research argues that pessimistic traders can use options as substitutes for short sales particularly when stocks are expensive to short. Motivated by this contention, we examine the relation between put-call ratios, short-selling activity, and constraints to short selling. Results show that (1) put-call ratios are inversely related, instead of directly related, to proxies for short-sale constraints and (2) the significant negative relation between current put-call ratios and future returns (Pan and Poteshman in Rev Financ Stud 19:871-908,2006) is orthogonal to proxies for short-sale constraints. These results indicate that short-sale constraints do not influence bearish option activity. While prior studies show that short sellers are generally contrarian in contemporaneous and past returns, we find that put-call ratios follow periods of negative returns. However, any observed return predictability contained in put-call ratios is driven by ratios that follow periods of positive returns. Springer Science+Business Media New York, 2014 Options nationallicence Short sales nationallicence Short sale constraints nationallicence Informed trading nationallicence Blau Benjamin Huntsman School of Business, Utah State University, 84322, Logan, UT, USA aut Brough Tyler Huntsman School of Business, Utah State University, 84322, Logan, UT, USA aut Review of Derivatives Research Springer US; http://www.springer-ny.com 18/1(2015-04-01), 51-73 1380-6645 18:1<51 2015 18 11147 https://doi.org/10.1007/s11147-014-9102-3 text/html Onlinezugriff via DOI BK010053 XK010053 XK010000 Metadata rights reserved Springer special CC-BY-NC licence nationallicence 1 research-article jats NATIONALLICENCE NATIONALLICENCE NL-springer NATIONALLICENCE 856 40 https://doi.org/10.1007/s11147-014-9102-3 text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Blau Benjamin Huntsman School of Business, Utah State University, 84322, Logan, UT, USA aut NATIONALLICENCE 700 1- Brough Tyler Huntsman School of Business, Utah State University, 84322, Logan, UT, USA aut NATIONALLICENCE 773 0- Review of Derivatives Research Springer US; http://www.springer-ny.com 18/1(2015-04-01), 51-73 1380-6645 18:1<51 2015 18 11147