Determining the relationship of stock options to market liquidity of Jollibee Food Corporation through bid-ask spreads and market depth from 2001-2008

• Main Authors: Decena, Karen Mae C., Espedido, Carlos Martin G., Ty, Kevin Christopher V.
• Format: text
• Language: English
• Published: Animo Repository 2011
• Subjects: Stock options > Philippines; Jollibee Foods Corporation; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/18331
• Institution: De La Salle University

The group aims to test the effects of stock option plans on market liquidity through the bid-ask spreads and the market depth of Jollibee Food Corporation in the period of 2001-2008 with the use of the decomposition mode of Madhaven, Richardson and Roomans (1997). Stock option plans have little effect on effective spreads however, bid-ask spreads and market depth improves significantly. These suggest that employees or officials who exercise their stock options can inject stock in the free float level and alter trading volume and share price. Based on the results, the researchers conclude that stock options do not affect market liquidity through bid-ask spreads and market depth.