Handbook of Short Selling

Editor-in-Chief:

  • Greg Gregoriou, School of Business and Economics, State University of New York, Plattsburgh, NY, USA

This comprehensive examination of short selling, which is a bet on stocks declining in value, explores the ways that this strategy drives financial markets. Its focus on short selling by region, its consideration of the history and regulations of short selling, and its mixture of industry and academic perspectives clarify the uses of short selling and dispel notions of its destructive implications. With contributions from around the world, this volume sheds new light on the ways short selling uncovers market forces and can yield profitable trades.
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Audience

  • Primary: Academics worldwide working in subjects connected with trading, risk management, financial modeling, financial regulation, and financial economics in general.
  • Secondary: Professionals working in trading, risk management, financial modeling, financial regulation, and financial economics.
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    Book information

    • Published: September 2011
    • Imprint: ACADEMIC PRESS
    • ISBN: 978-0-12-387724-6

    Reviews

    "The global financial crisis triggered a debate about pros and cons of trading practices such as short selling and required policy responses. This is precisely the theme of this work. It has been well chosen and exhaustively analyzed, making this book a mandatory reading for anybody with an interest or responsibilities in the microstructure of financial markets."

    --Marco Rossi, Senior Economist, International Monetary Fund

     

    "This book is a very timely and extremely useful guide to the subtle and often difficult issues involved in short selling - a subject that is more relevant than ever since the financial crisis. It is written by many experts and covers by its manyfold chapters all aspects of short selling from different international points of view. It will surely lead to many new insights."

    --Carsten S. Wehn, Head of Risk Modelling, DekaBank, Germany

     

    "Short selling so far has been an investment technique that was wildly misunderstood by politicians, academics and practitioners alike. This book with 39 chapters written by leading academics and practitioners represents the ultimate resource for everyone who wants to really understand the concept. The Handbook of Short Selling covers regulation and best practices in various countries, the effect of short-selling bans throughout the financial crisis, as well as the diversification benefits of the addition of short sellers to a traditional investment portfolio."

    --Dieter Kaiser, Director of Investment Management, Feri Institutional Advisors GmbH

    "Many people are discussing the role and the effects of short selling in the (current) financial crisis, but these experts contributing to the 'Handbook of Short Selling' really know what they are talking about. The Handbook is a must read for every participant in the capital markets."

    --Christian Hoppe, Commerzbank AG, Frankfurt am Main

     

     "Short-selling is a prevalent feature of modern financial markets which has become hotly and controversially debated. The 'Handbook of Short-Selling' couldn’t be more timely. It provides an accessible and comprehensive treatment of the subject. It is a valuable reference for anyone interested in understanding the role of short-selling in the financial crisis of 2007-2009."

    --José Manuel González-Páramo, Member of the Executive Board, European Central Bank




    Table of Contents

    I. REGULATION IN THE US AND CANADA
    1. Short Sales and Financial Innovation: How to take the Good while Avoiding Widespread Default
    nbsp;nbsp; Graciela Chichilnisky
    2. Goldman Sachs’s Short-Sale Swap Shop
    nbsp;nbsp; Edward Pekarek and Christopher Lufrano
    3. Off-Shore Short Sales after Morrison: Will the SEC be Emboldened or Constrained?
    nbsp;nbsp; Ed Pekarek and Soufiane Cherkaoui
    4. Regulating Short Sales in the U.S. in the 21st Century
    nbsp;nbsp; Houman B. Shadab
    5. The Evolution of Short Selling Regulations and Trading Practices in the US
    nbsp;nbsp; Chinmay Jain, Pankaj K. Jain and Thomas H. McInish
    6.nbsp;Financing Techniques for Short Sellers
    nbsp;nbsp; Stuart McCrary

    II. EUROPEAN MARKETS
    8. Are Restrictions on Short Selling Good? A Look on European Markets
    nbsp;nbsp; Mohamed El Hedi Arouri, Fredj Jawadi, Duc Khuong Nguyen
    9.
    Short Selling and Clearing Settlement in Europe: Relations and Implications
    nbsp;nbsp; Daniela Russo and Simonetta Rosati
    10. The 2008 Emergency Regulation of Short Selling in the US, UK and Australia
    nbsp;nbsp; Kym Sheehan
    11. Reflections on Short Selling Regulations in Western and Eastern Europe
    nbsp;nbsp; Jeannine Daniel and François-Serge Lhabitant
    12.Regulating Short Selling: The European Framework(s) and the Regulatory Arbitrages
    nbsp;nbsp; Giampaolo Gabbi and Paola Giovinazzo
    13.
    Do Option Prices Reveal Short-Sale Restrictions Impact on Banks’ Stock Prices? The German Case
    nbsp;nbsp; Stefano Corradin, Marco Lo Duca, and Cristina Sommacampagna
    14. Short Selling in France During the Crisis: The Bans and What has Changed Since the Euro
    nbsp;nbsp; CorrectionEmmanuel Fragnière and Iliya Markov

    III. CHINA, JAPAN AND AUSTRALIA
    15.The Chinese Real Estate Bubble: Is it an Opportunity for Short-Selling?
    nbsp;nbsp; Peter Treadway and Michael C S Wong
    16.
    Introduction of Margin Trading and Short Selling in China’s Securities Market: The Case of the Disordered Warrant Prices
    nbsp;nbsp; Wei Fan, Qingbin Meng, Liu Yang, Lingqing Xing and Sihai Fang
    17.
    The Impact of Short Selling on China Stock Prices
    nbsp;nbsp; Michael C. S. Wong and Kaiguo Zhou
    18. Short Selling the Real Estate Bubble in China
    nbsp;nbsp; Kaiguo Zhou
    19. Impact of Macro Indicators on Short Selling: Evidence from Tokyo Stock Exchange
    nbsp;nbsp; M. Nihat Solakoglu and Mehmet Orhannbsp;
    20. The New Regulatory Development for Short Selling in Asia
    nbsp;nbsp; Jeannine Daniel and François-Serge Lhabitant
    21.
    Short Selling in Australia: The Current State of Play in Practice and in Regulation
    nbsp;nbsp; John Simpson, Peter Mayall and Mathew Ratty
    22.
    Sourcing Securities for Short Sales: The Proper Legal Characterisation of Securities Loans in Australia
    nbsp;nbsp; Paul U. Alinbsp;

    IV. EMERGING MARKETS
    23. Short-Selling in Emerging Markets: A Comparison of Market Performances during the Global Financial Crisis
    nbsp;nbsp; Mario A. Maggi
    24.
    A Review of Short Selling in Emerging Markets: Latin America and Eastern Europe
    nbsp;nbsp; Miguel Díaz-Martínez and Emmanuel Fragniere
    25.
    Short Sales: Ambrosia or Kryptonite for Emerging Markets?
    nbsp;nbsp; Ed Pekarek and Maryam M. Meseha
    26.
    Short Selling Consistency in South Africa
    nbsp;nbsp; Dave E. Allen, Robert J. Powell and Abhay Kumar Singh
    27.
    Short Selling in Russia: Evidence from Medium and Long-Term Portfolio Strategies
    nbsp;nbsp; Dean Fantazzini, Alexander Kudrov, Andrew Zlotnik and Elena Dukhovnaya
    28.
    Performance Persistence of Short Sellers
    nbsp;nbsp; Meredith A. Jones
    29.
    An Empirical Analysis of Short Biased Hedge Funds’ Risk-Adjusted Performance: A Panel Approach
    nbsp;nbsp; Greg N. Gregoriou and Razvan Pascalau

    V. PORTFOLIO MANAGEMENT AND PERFORMANCE
    30. Short Selling by Portfolio Managers: Performance and Risk Effects across Investment Styles
    nbsp;nbsp; Russell B. Gregory-Allen and David M. Smith
    31.
    Short Selling in an Asset Allocation Framework--the Search for Alpha
    nbsp;nbsp; Nils S. Tuchschmid, Erik Wallerstein and Sassan Zaker
    32.
    Machine Learning and Short Positions in Stock Trading Strategies
    nbsp;nbsp; David E. Allen, Robert Powell and Abhay Kumar Singh
    33.
    Short-Selling Stock Indices on Signals from Implied Volatility Index Changes: Evidence from Quantile Regression Based Techniques
    nbsp;nbsp; David E. Allen, A Kramadibrata, R. Powell and A K. Singh

    VI. MODELING, EARNINGS AND ANNOUNCEMENTS
    34. Short-Selling and the Equity Premium Puzzle
    nbsp;nbsp; Jorgen-Vitting Andersen
    35.
    Affine Term Structure Models and Short-Selling: The Liberal Case against Prohibitions
    nbsp; Vicente Jakas
    36. Short Sale Constraints in the Equity Market and the Term Structure of Interest Rates
    nbsp;nbsp; Abraham Lioui
    37.
    Short-Selling Assessment Where Consumer Prices Involve both Currency Trades and Weather Shocks
    nbsp;nbsp; Jack Penm and R. Deane Terrell
    38.
    Aggregate Short Selling during Earnings Seasons
    nbsp;nbsp; Paul Brockman, Andrew Lynch and Andrei Nikiforov
    39.
    The Information Content of Short-Selling before Macroeconomic Announcements
    nbsp;nbsp; Paul Brockman and (Grace) Qing Hao