This paper demonstrates that investor irrationality can be contagious across markets.Supplementing existing studies on resale option theory,we illustrate that warrant speculation could spill over to the underlying stock market.Our findings indicate that high turnover of underlying stocks is associated with previous days high unexpected turnover of warrants,or previous days larger price deviation of warrants from theoretical prices.The results are robust with alternative measures,regression specifications and various samples.In addition,this paper highlights the mechanisms of speculation spillovers.Our evidence shows that speculation in warrants may fuel speculation in underlying stocks through limited attention.