This paper investigates whether trading volume in REIT options predicts future REIT returns and the role of retail investors in this relationship. Using REIT‐level option and stock market data, the authors find that high option volume relative to stock volume predicts lower future returns, and this effect is stronger when retail investor activity is higher. The results suggest that retail investors’ trading in REIT options may contribute to short‐term mispricing in REIT markets.

V53-I4-Ep.6 Decoding REIT Options

Bite-size briefings on the newest research from Real Estate Economics, the premier journal of the American Real Estate and Urban Economics. Each episode, our AI host distills a fresh paper into the essentials: question, method, findings, and why it matters. Stay current with the cutting-edge research in the field of real estate, economics, and finance.

V53-I4-Ep.6 Decoding REIT Options

Real Estate Economics - Podcast