Publication Date
6-2026
Description
Our paper studies the option market reactions to judicial decisions in the United States Supreme Court (SCOTUS) relating to cases where at least one party involved is a public firm. Prior research finds the stock market is unable to anticipate SCOTUS's actions and registers a significant negative stock market reaction to the grant of certiorari (acceptance of a petition to review a lower court's decision) for respondents and, surprisingly, for petitioners as well. We show the negative price reaction for both petitioner and respondent firms is a consequence of increased uncertainty. We also provide evidence that on the day certiorari is granted, the option market anticipates the final decision by SCOTUS. We believe we are the first to study the ability of futures markets to predict SCOTUS decisions.
Volume
46
Issue
6
Open Access
Full text attached
Link to Published Version
https://doi.org/10.1002/fut.70094
DOI
https://doi.org/10.1002/fut.70094
Recommended Citation
Davis, Yehuda; Govindaraj, Suresh; Liu, Yi; and Suslava, Kate. "Option Market Value-Based Reaction and Anticipation of Corporate-Related Decisions by the United States Supreme Court.." (2026) .