Title: Mysterious Spike in Short Selling Spurs Investigation Into Unprecedented Israeli ETF Activity
Subtitle: Researchers at Columbia University and New York University suspect traders had advance knowledge of the October 7th Hamas attacks
In a startling discovery, researchers from Columbia University and New York University have uncovered a surge in short selling activity linked to the MSCI Israel Exchange Traded Fund (ETF) just days before the October 7th Hamas attacks. According to their findings, this level of short selling far surpassed what was observed during the Covid-19 pandemic, the 2014 Israel-Gaza war, and even the 2008 global financial crisis.
The research paper, intriguingly titled “Trading on Terror?”, was authored by former SEC commissioner Robert Jackson Jr. and Columbia law professor Joshua Mitts. Their findings suggest that traders may have been privy to advanced knowledge of the attacks, enabling them to reap substantial profits from the ensuing market downturn.
However, investigators were unable to directly identify the traders behind these transactions or determine the sources of their information. Despite this hurdle, US regulators possess nonpublic data that could potentially illuminate the unusual market activity preceding the attacks.
Interestingly, the surge in short selling activity extended beyond the Israeli ETF market. Bets against Israeli securities traded on the Tel Aviv Stock Exchange also experienced a dramatic increase in the days leading up to the attacks. However, no corresponding rise was observed in short selling of Israeli companies traded on US exchanges.
Furthermore, the researchers noticed an uptick in short-dated options contracts on shares of Israeli firms traded on US exchanges. This suggests that a select few individuals or entities may have been involved in this particular trading activity. However, caution is advised against drawing conclusions about the direct involvement of specific parties such as Hamas, as the researchers urge further investigation to fully ascertain culpability.
Notably, the US Securities and Exchange Commission and the Israeli Securities Authority have yet to offer any comments regarding the intriguing research findings. As the investigation proceeds, tensions mount, and questions continue to swirl around the unprecedented spike in short selling activity leading up to the October 7th Hamas attacks.