This study empirically examines the impact of trading activities on the liquidity of individual equity options which is measured by the proportional bid-ask spread.There are three main findings.First,the option return volatility,defined as the option price elasticity times the stock return volatility,has a much higher power in explaining the spread variations than the commonly considered liquidity determinants such as the stock return volatility and option trading volume.The various identified determinants collectively explain about 55% of the spread variations,out of which about 45% is explained by the option return volatility alone.Second,after controlling for all the liquidity determinants,we find a statistically significant maturity-substitution effect due to expiration cycles.When medium-term options (60-90 days maturity) are not available,traders use short-term options as substitutes,causing these options’ volume to increase which in turn leads to a smaller bid-ask spread or better liquidity.Third,we also find a statistically significant moneyness-substitution effect induced by the stock return volatility.When the stock return volatility goes up,trading shifts from in-the-money options to out-of-the-money options,causing the latter’s spread to narrow.The literature on the liquidity properties of individual equity options is almost nonexistent.Our study fills an important gap in this area.