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The time series pattern of our measure (PROBINF) in an intra-day analysis around earnings announcements is consistent with previous findings and with expectations regarding informed trading.
Using novel earnings calendar data, we show that firms’ advanced scheduling of earnings announcement dates foreshadows their earnings news.
Finally, using earnings announcements subsequent to management forecast disclosures, we report results that suggest that management forecasts trigger preemptive information processing activities before the scheduled information events.
I show that there is a kink in the distribution of reported earnings located close to but to the left of the earnings forecast.
This paper uses a comprehensive cross-sectional and time-series sample to provide evidence that LLT enhances efficiency around earnings announcements.
BBF’s results also raise the question of how the macroeconomic information content of management earnings forecasts differs from that of realized earnings.
This paper provides evidence that this relationship does not improve the accuracy of the earnings forecasts, but stimulates optimistic forecasts.

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How does the relationship between the ask and bid price affect market liquidity?
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The relationship between the ask and bid price, commonly referred to as the bid-ask spread, plays a crucial role in determining market liquidity. A narrower bid-ask spread typically indicates a more liquid market, as it suggests that the cost of executing transactions is lower, making it easier for participants to buy and sell securities without causing significant price movements. Conversely, a wider spread is indicative of lower liquidity, implying higher transaction costs and potentially greater difficulty in executing trades without affecting market prices. Several factors influence the bid-ask spread, including stock price volatility, trading volume, and the presence of information asymmetry among market participants. High stock price volatility and lower trading volumes tend to increase the bid-ask spread, thereby reducing market liquidity. Information asymmetry, where one party in a transaction has more or better information than the other, can also widen the spread. This is because market makers, who facilitate trades by buying and selling from their inventory, compensate for the risk of trading with better-informed participants by demanding a higher premium, reflected in a wider spread. Moreover, the structure of the market and the behavior of its participants significantly affect the bid-ask spread. For instance, markets with a specialist system or those that exhibit monopoly characteristics may have wider spreads due to the market-making entity's pricing power. Additionally, corporate governance practices and the ownership structure of firms can influence liquidity. Well-governed firms with transparent information practices tend to have narrower spreads, as the reduced information asymmetry lowers the risk for market makers. Empirical studies have shown that the bid-ask spread is a critical measure of market liquidity, with its components—order processing costs, inventory holding costs, and the cost of adverse selection due to information asymmetry—directly impacting the ease with which assets can be traded. Furthermore, innovative measures of stock liquidity, such as the average value of ask/bid adjusted for the average inter-arrival rate, provide insights into the natural trading behavior of stocks, further emphasizing the importance of the bid-ask spread in assessing market liquidity.
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