New research reveals high option trading fees and barriers to competition

Carnegie Mellon University

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Could the rules of the options market be quietly costing you ten times more than your stock trades? A new study in The Review of Financial Studies, “Payment for Order Flow and Option Internalization,” uncovers how current market rules protect high profits for option wholesalers and create significant financial incentives for brokers to favor option trading over stocks. Authors Thomas Ernst of the University of Maryland and Chester Spatt of Carnegie Mellon University’s Tepper School of Business highlight that while recent regulatory focus centers on the stock market, the more complex and lucrative options market remains largely unaddressed.

The research finds that routing option orders generate substantially higher payment for order flow for brokers than routing stock orders. Currently, an average retail option trade earns a broker approximately 40 cents per 100 shares, which is double the 20 cents earned for a comparable stock trade. When considering typical investment amounts, a dollar invested in options can generate 10 times as much revenue for a broker as an investment in equities. This discrepancy creates a potential conflict of interest, as brokers may face financial pressure to encourage clients toward more frequent or complex option trading.
The study also identifies a significant barrier to entry in the option wholesaling industry. In the option market, designated market makers (DMM) hold a unique advantage by obtaining the first five contracts of any order they bring to an exchange. This rule allows dominant firms to trade against retail orders without needing to offer the best price on the public market. Currently, just two firms, Citadel and Susquehanna control 60 percent of these DMM positions and purchase over 70 percent of all retail option order flow.

These structural advantages protect wholesaler profits but often result in higher costs for individual investors. While price-improvement auctions exist to give investors better deals, wholesalers often use these auctions selectively or benefit from rules that discourage other participants from bidding.

The findings come at a time of massive growth in retail option trading. The authors suggest that expanding data disclosure requirements and reducing certain exchange fees could help lower costs for retail clients. By shedding light on these market structures, the study provides a roadmap for regulators to ensure fairer competition and better outcomes for everyday investors.

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Journal

Review of Financial Studies

DOI

10.1093/rfs/hhaf108 

Article Title

Payment for Order Flow and Option Internalization

 

Helping seniors thrive through connection

East Tennessee State University

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Credit: ETSU

East Tennessee State University is one of three universities nationwide selected to develop and launch a new program designed to connect older adults living with behavioral health conditions to local senior community meal sites — strengthening nutrition, reducing isolation, and supporting overall well-being.

ETSU was awarded the three-year grant by the U.S. Administration for Community Living’s Innovation in Nutrition Programs and Services program. Texas A&M University and Virginia Commonwealth University also received grants as part of the initiative, totaling about $1.49 million.  

ETSU’s project, Clinics Helping Adults Thrive (CHAT) through Senior Nutrition Engagement in Tennessee, is designed to connect Tennesseans age 60 and older who are receiving behavioral health services with their local senior meal site.

The initiative is being developed in partnership with the Tennessee Department of Disability and Aging and a statewide network of community partners including the Rural Health Association of Tennessee and the Tennessee Charitable Care Network.

“Community partners are absolutely essential to our work,” said Dr. Laura Hunt Trull, the project’s principal investigator. “We cannot make these changes without the full investment of our community partners, and I am grateful we’ve had such a resounding positive response from our partners so far.”

Trull said they’re still in the early stages of this work, but hopes the end result will enhance nutrition, decrease loneliness, and improve general well-being among older adults receiving behavioral health services.

“It's not worth very much to know about a challenge if you're not willing to bring your resources to bear on addressing the challenge,” said Trull, who is a faculty member in both ETSU’s College of Health Sciences and the Quillen College of Medicine.

“I see the CHAT program as an opportunity to see the data through to projects that address it and make a real difference,” she added.  

It’s the latest initiative at ETSU focused on supporting healthy aging across the state.

In November, ETSU earned the Age-Friendly University designation from the Age-Friendly University Global Network, a prestigious consortium of more than 140 higher education institutions committed to promoting positive and healthy aging, intergenerational learning and access to education across the lifespan.

University faculty are also contributing to the state’s Lifelong Tennessee Steering Committee, part of a multi-year initiative to ensure Tennesseans are well cared for and well supported while they age.

ETSU’s Center for Rural Health and Research, housed in the College of Public Health, has also played a key role in forming the state’s multisector plan for aging, hosting a symposium on the topic in 2023 and developing a statewide dashboard for aging data.

The CHAT initiative builds on ETSU’s growing portfolio of aging-related work. It reflects the university’s commitment as the Flagship of Appalachia to deliver practical, community-centered solutions across the region.

To learn more about ETSU’s College of Health Sciences or the Quillen College of Medicine, visit etsu.edu/chs/ or etsu.edu/com/. Clinics and senior meal sites across Tennessee can email Trull at trulllh@etsu.edu to get involved.

 

Offended? Not me. How people use denial to appear rational on social media

University of East Anglia

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People often downplay being offended during online arguments to appear more rational, according to new research from the University of East Anglia (UEA). 

A new study reveals how social media users navigate, negotiate and often reject accusations of being offended during heated online exchanges, even when their language suggests strong emotional involvement. 

Recent debates illustrate the pattern. For example, when YouTuber and professional boxer Jake Paul criticised singer Bad Bunny’s Super Bowl halftime show, he faced backlash and repeatedly reframed his comments as ‘clarifications’ rather than emotional reactions.  

Similarly, heated reactions around singer-songwriter Billie Eilish’s Grammys comments saw users choose wording such as “I’m not offended”, presenting themselves as rational while clearly deeply invested in the discussion. 

These high‑profile moments reflect the same patterns of denial, moral positioning, and emotional management uncovered in the UEA study. 

The team, which included researchers from the University of Kent, analysed a network of real X (Twitter) exchanges that began with a woman telling a joke and quickly spiralled into a heated argument.  

One male participant was repeatedly accused of being “offended” but strongly denied it, even as his own language revealed frustration and moral judgement.  

Dr Chi‑Hé Elder, from UEA’s School of Media, Language and Communication Studies, said: “Without the benefit of facial expressions or tone of voice to draw on, interactions in the digital world can quickly become complicated. 

“People may claim that they aren’t offended, but if they simultaneously describe comments as toxic or morally wrong, this looks very much like offence‑taking behaviour.” 

The study shows that offence isn’t just an emotional reaction, it also performs a social function. It can be used to signal disapproval, make a moral point, or shape how we want to be seen by others.  

That makes everyday phrases like “being offended” ambiguous – they can refer to feeling upset, or to the public performance of appearing offended. 

But why do people deny being offended? 

According to the researchers, admitting to offence carries negative connotations. It can make someone appear overly emotional or undermine their credibility in a debate. By rejecting the label, people can try to take the moral high ground, presenting themselves as calm and rational even when their behaviour suggests otherwise. 

Dr Elder said: “It is the ambiguity of phrases like ‘you’re offended’ that gives people room to deny being offended, even when their behaviour indicates the opposite.” 

Ultimately, the team argues that offence is negotiated rather than clear‑cut and that denying it has become a strategic tool for protecting one’s reputation in online arguments. 

The findings raise wider questions about how we judge emotion and rationality in digital spaces, and how norms around humour, sexism and politeness shape online interactions. 

Future research will explore whether these patterns appear across different platforms and cultural contexts. 

The paper was led by Dr Ibi Baxter-Webb, a researcher in Communication Studies at UEA, and is part of a project called Problematic Humour led by Dr Chi‑Hé Elder. 

The research, Fragile men and fishy arguments: Attributing and disputing offence in online interaction, is published in the Journal of Language Aggression and Conflict (JLAC). It was funded by the British Academy/Leverhulme Trust as part of the Problematic Humour project. 

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Journal

Journal of Language Aggression and Conflict

DOI

10.1075/jlac.00147.bax 

Subject of Research

People

Article Title

Fragile men and fishy arguments: Attributing and disputing offence in online interaction

 

Prescription drug promotion by social media influencers

JAMA Network Open

About The Study: 

This systematic scoping review study of prescription drug promotion by influencers found that such promotion carried risks of inaccurate or misleading advice, often amplified through personal and emotionally resonant narratives in an environment with limited oversight and enforcement. Despite the small and fragmented evidence base, these findings highlight the urgent need for updated regulatory guidance, standardized and enforceable disclosure requirements, stronger platform accountability, and targeted digital literacy initiatives. Policymakers and researchers should act proactively to safeguard public health.

Corresponding Author: To contact the corresponding author, Raffael Heiss, PhD, email raffael.heiss@mci.edu.

To access the embargoed study: Visit our For The Media website at this link https://media.jamanetwork.com/

(doi:10.1001/jamanetworkopen.2026.2738)

Editor’s Note: Please see the article for additional information, including other authors, author contributions and affiliations, conflict of interest and financial disclosures, and funding and support.

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Embed this link to provide your readers free access to the full-text article 

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About JAMA Network Open: JAMA Network Open is an online-only open access general medical journal from the JAMA Network. On weekdays, the journal publishes peer-reviewed clinical research and commentary in more than 40 medical and health subject areas. Every article is free online from the day of publication. 

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Journal

JAMA Network Open

 

Frequent social media use could impact child development

Adolescents who use social media may have weaker reading skills but higher processing speed

University of Georgia

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Regular social media use across early adolescence is related to worse reading and vocabulary development over time, according to new research from the University of Georgia.

The study found that adolescents who used social media more often each day tend to struggle with recognizing and pronouncing words.

The new findings come just as Australia became the first country to ban children under 16 from using social media. As other countries consider similar measures, and social media platforms roll out age verification to restrict adolescents’ online activity, the study raises additional concerns on the impact of social media and screen use on childhood development, the researchers said.

“The brain is like a muscle. The more you use it, the more it changes according to however you’re using it,” said Cory Carvalho, lead author of the study who received his doctorate from the UGA College of Family and Consumer Sciences. “If you think of the Olympics, the figure skaters are really good at figure skating because they spend eight hours a day doing it. Their muscles are wired to be figure skating machines.

“If kids spend over eight hours a day using social media, that’s what their brains are going to adapt to and be wired for.”

Spending excessive time on social media linked to weaker reading skills, vocabulary

The study relied on longitudinal data from the ongoing Adolescent Brain Cognitive Development study, which follows more than 10,000 adolescents over six years starting around age 10.

The researchers found that frequent social media use was linked to struggles with reading and vocabulary across four years.

“There’s a time cost to social media use. If you’re spending time doing one thing, that means you’re not spending time doing another thing,” Carvalho said. “Other studies found that the more kids are using social media, the less they’re reading, so reading development lags behind. We also found this with their vocabulary.”

Weaker reading and vocabulary skills could impact a child’s school performance.

Children who used social media more often also struggled with attentional control across the same period. This could be because juggling multiple tasks and frequent notifications disrupt kids’ attention, but it’s also possible that adolescents who already struggle with focusing are more likely to use social media, the researchers said.

Kids who use social media more tend to process information faster

Not all the impacts of social media use were negative, though, the researchers said. Children who were on social media frequently processed information faster and had shorter reaction times. However, the researchers cautioned that these observed benefits may be limited to screen-based assessments of processing speed, like the one used in the study.

“It’s not necessarily that social media is having only these negative effects or only these positive effects,” said Niyantri Ravindran, co-author of the study and an assistant professor in the UGA College of Family and Consumer Sciences. “The negative effects on vocabulary and reading are more expected because social media is potentially depriving kids of opportunities to engage in some of those higher-level cognitive skills.”

Social media can also help children stay connected with others, especially if they’re in an environment where making friends is difficult, the researchers said.

Limiting screen time, waiting to get kids a smartphone could build better habits

To help combat those negative effects, the researchers suggest limiting screen time for adolescents, especially before bed. They also recommend waiting until kids are older to purchase a smartphone.

If parents do need to stay in touch with their kids, a “dumb phone” that can’t access social media could also be an option, the researchers said.

“Social media is new, so everybody’s trying to figure out what we do with this new paradigm,” Carvalho said. “Kids like it. Adults like it. And everybody uses it.

“What you’re going to see is that a lot of different states, countries and organizations are going to try different things. Hopefully, we settle on some norms that work for kids and not for profits.”

The study was published in the Journal of Research on Adolescence.

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Journal

Journal of Research on Adolescence

DOI

10.1111/jora.70125 

Article Title

Associations between social media and crystallized and fluid performance trajectories in early adolescence