Badshah, IKoerniadi, H2022-05-262022-05-2620222022Journal of Risk and Financial Management, 15(2), 53. https://doi.org/10.3390/jrfm150200531911-8066https://hdl.handle.net/10292/15166By employing the modified net buying pressure as a measure of informed option trading, this study tested whether option trading around quarterly earnings announcements is either directionally motivated and/or volatility motivated. We found evidence that is consistent with the idea that option investors have private information prior to positive earnings announcements and use at-the-money options to exploit their informational advantage. In the post-event period, however, informed option investors trade by using deep-out-of-the-money and out-of-the-money options. We documented limited evidence on the volatility-motivated option trading, and our results suggest that this type of option trading could be motivated by hedging purposes only.© 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/).Earnings; Announcements; Options; Informed trading; Net buying pressure; Volatility; Direction; At-the-money; Out-of-the-money; Deep-out-of-the-moneyJournal ArticleOpenAccess10.3390/jrfm15020053