In a recent investigation by US researchers Robert J. Jackson Jr. and Joshua Mitts from New York University and Columbia University, it was found that traders in New York and Tel Aviv were placing bets on a collapse in the Israeli stock market prior to a terrorist attack by Hamas. It is unclear whether Hamas was directly involved in these transactions.
The researchers discovered that certain traders appeared to have inside information about the impending attacks and profited from them. The Israeli security authorities are taking these reports seriously and are investigating the events. Short sellers, who speculate on falling prices, were particularly active in trading the ETF MSCI Israel, which tracks Israeli stocks listed on the Tel Aviv Stock Exchange (TASE).
Traders placed significant bets on short selling of the ETF five days before the attack, leading the researchers to suspect that some traders had insider information. The volume of short sales on October 2nd exceeded that seen during other times of crisis, such as the financial crisis in 2008 or the Covid pandemic in 2020. Israeli companies such as Checkpoint, Nice, Teva, and Bank Leumi were among those listed on the TASE.
Although the researchers did not directly link inside information used by speculators to Hamas, Israeli media suggests that Hamas may have been involved. If Hamas did use financial techniques for funding, this could have serious implications for criminal authorities and regulators worldwide. Suspicious trading activity had also been detected prior to a previous incident in April, indicating a pattern of behavior among certain market participants.
Short sellers take advantage of non-public information to profit from falling prices by borrowing shares, selling them at higher prices later on than they bought them back at lower prices later on when they buy them back again at a lower price later on when they buy them back again at a lower price later on when they buy them back again at a lower price later on when they buy them back again at a lower price later
