Fahlenbrach, R.Sandås, P.2010-10-272010-10-272010-10-27201010.1016/j.jbankfin.2010.02.027https://infoscience.epfl.ch/handle/20.500.14299/56196WOS:000281020900006We study trading in option strategies in the FTSE-100 index market. Trades in option strategies represent around 37% of the total number of trades and over 75% of the total trading volume in our sample. We find some evidence that order flow in volatility-sensitive option strategies contains information about future realized volatility. We do not find evidence that order flow in directionally-sensitive option strategies contains information about future returns. Overall, our evidence suggests that option strategies are used both by traders who possess non-public information about future volatility and by uninformed speculators who appear to follow unprofitable trend chasing strategies. © 2010 Elsevier B.V.Option strategiesOption spreadsOption combinationsVolatility tradingtext::journal::journal article::research article