Following the analysis framework of Poteshman (2001), we use a unique dataset including the complete history of all transactions in the Taiwan options market to investigate the patterns of investor misreaction from the marketwise observations and the transactions of four different investor categories. Overall, investors initiate their reaction to unexpected information from short-horizon options and then adjust their positions in long-horizon options with a certain degree of delay because of the liquidity concern. Both of short- and long-horizon reactions are insufficient. lthough investor misreaction tends to increase in the quantity of previous similar unexpected shocks, the misreaction to the current unexpected shocks still dominates the effect of increasing misreaction. The comparison for alternative investor categories shows that foreign institutional investors have the lowest degree of misreaction and institutional investors correct their misreaction more promptly.