Handbook of Short Selling

1st Edition

Editor-in-Chiefs: Greg Gregoriou
Hardcover ISBN: 9780123877246
eBook ISBN: 9780123877253
Imprint: Academic Press
Published Date: 28th September 2011
Page Count: 624
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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.

Key Features

  • Combines academic and professional research on short selling in all major financial markets
  • Emphasizes details about strategies, implementations, regulation, and tax advantages
  • Chapters provide summaries for readers who want up-to-date maps of subject landscapes


  • 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.
  • Table of Contents



    About the Editor

    Contributor Bios

    Chapter 1. Short Sales and Financial Innovation

    1.1. Introduction

    1.2. Markets with Short Sales

    1.3. Gains from Trade

    1.4. Social Diversity, Volatility, and Default

    1.5. Financial Innovation Creates Systemic Risks of Widespread Defaults

    1.6. Introducing Graduated Reserves

    1.7. Graduated Reserves Restore Stability and Prevent Default

    1.8. Conclusion

    Chapter 2. The Goldman Sachs Swaps Shop

    2.1. Introduction

    2.2. “Weapons of Mass Financial Destruction”

    2.3. Key Sources of Relevant U.S. Securities Law

    2.4. SEC v. Goldman Sachs & Co., et al.—The Complaint

    2.5. Vampyroteuthis Infernalis—Collateral Consequences

    2.6. Conclusion

    Chapter 3. Off-Shore Short Sales after Morrison

    3.1. Introduction

    3.2. Goldman and Paulson Enter into a Marriage of Convenience

    3.3. The Securities and Exchange Commission Charges Goldman and Tourre with Securities Fraud in Connection with ABACUS Structuring and Marketing

    3.4. Climax: Dodd–Frank Affords the Securities and Exchange Commission Extraterritorial Jurisdiction

    3.5. Conclusion—Tourre and His Cohorts Celebrate a Pyrrhic Victory

    Chapter 4. Regulating Short Sales in the 21st Century

    4.1. Introduction

    4.2. U.S. Short Sale Regulation Background

    4.3. Current Securities and Exchange Commission Regulation of Short Selling Activity

    4.4. Conclusion

    Chapter 5. Evolution of Short Selling Regulations and Trading Practices

    5.1. Introduction

    5.2. Literature Review

    5.3. Historical Background on Short Selling

    5.4. Short Selling and Financial Crisis

    5.5. A Detailed Analysis of Short Selling in Recent Times

    5.6. Conclusion

    Chapter 6. Financing Techniques for Short Sel


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    About the Editor-in-Chief

    Greg Gregoriou

    A native of Montreal, Professor Greg N. Gregoriou obtained his joint Ph.D. in finance at the University of Quebec at Montreal which merges the resources of Montreal's four major universities McGill, Concordia, UQAM and HEC. Professor Gregoriou is Professor of Finance at State University of New York (Plattsburgh) and has taught a variety of finance courses such as Alternative Investments, International Finance, Money and Capital Markets, Portfolio Management, and Corporate Finance. He has also lectured at the University of Vermont, Universidad de Navarra and at the University of Quebec at Montreal. Professor Gregoriou has published 50 books, 65 refereed publications in peer-reviewed journals and 24 book chapters since his arrival at SUNY Plattsburgh in August 2003. Professor Gregoriou's books have been published by McGraw-Hill, John Wiley & Sons, Elsevier-Butterworth/Heinemann, Taylor and Francis/CRC Press, Palgrave-MacMillan and Risk Books. Four of his books have been translated into Chinese and Russian. His academic articles have appeared in well-known peer-reviewed journals such as the Review of Asset Pricing Studies, Journal of Portfolio Management, Journal of Futures Markets, European Journal of Operational Research, Annals of Operations Research, Computers and Operations Research, etc. Professor Gregoriou is the derivatives editor and editorial board member for the Journal of Asset Management as well as editorial board member for the Journal of Wealth Management, the Journal of Risk Management in Financial Institutions, Market Integrity, IEB International Journal of Finance, and the Brazilian Business Review. Professor Gregoriou's interests focus on hedge funds, funds of funds, commodity trading advisors, managed futures, venture capital and private equity. He has also been quoted several times in the New York Times, Barron's, the Financial Times of London, Le Temps (Geneva), Les Echos (Paris) and L'Observateur de Monaco. He has done consulting wo

    Affiliations and Expertise

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


    "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