Open-source intelligence (OSINT)
🔻 IMPORTANT 【重要】哈瑪斯恐怖主義與知情交易
▪️ 哈瑪斯恐怖主義與知情交易是本篇的主題。就以巴衝突和本港輿論導向而言，包括港媒在內的所謂建制仍是一面倒地盲撐支配巴勒斯坦地區的‘武裝組織’恐怖主義組織哈瑪斯（Hamas），以及也門恐怖主義組織的胡塞 (Houthi)。即使哈瑪斯跟新納粹主義一樣慣以可憐的以色列人質和巴勒斯坦平民當作人盾，並把平民設施當作基地和軍用地道網絡的出入口 (see Hamas’ use of human shields in Gaza)，甚至，支持哈瑪斯恐怖主義的也門胡塞轟炸航過紅海的香港貨船（see Attack on Maersk Gibraltar, Hong Kong-flagged ship traveling from Oman to Saudi Arabia, is latest in series of seaborne assaults from Yemeni rebels amid Israel-Hamas war）也仍盲撐和粉飾其恐怖主義是一股歪風。如此瘋狂地顛倒了倫理道德。不過，這樣下去，最終恐怕歇斯底里地毀掉以中關係和世界猶太人和華人的千年友誼，甚至，把親中親俄的以色列不可逆轉地趕往美國陣營以及其反華聯盟則只能歸咎於中方自己而已。而市民應當秉持全面和客觀的立場，以避免種族歧視以及選邊站的陷阱。至少，我們香港市民只需要謹慎和理解的文明態度，而非政治化的態度，是因為以色列和巴勒斯坦地區都並不是什麼香港的敵人。同樣，在俄烏戰爭上，烏克蘭和俄國都亦非香港的敵人。至少毫無必要採取敵對立場。奇怪的是為何港媒以及這個島嶼的垃圾政棍一定要市民仇恨和選邊站？在多邊主義時代，不破壞外交關係的方式和原則首先就是不選邊站。
Insofar as the Israeli-Palestinian conflict and public opinion in Hong Kong are concerned, the so-called establishment, including the Hong Kong media, still blindly supports Hamas, an 'armed' terrorist organization that dominates the Palestinian area, and Houthi, a Yemeni terrorist organization. Even though Hamas, like the neo-Nazis, is used to using poor Israeli hostages and Palestinian civilians as human shields and civilian facilities as entrances and exits to a network of bases and military tunnels (see Hamas' use of human shields in Gaza), and even the Yemeni Houthis, who support Hamas terrorism, bombed a Hong Kong-flagged ship traveling from Oman to Saudi Arabia in the Red Sea (see The attack on Maersk Gibraltar, a Hong Kong-flagged ship traveling from Oman to Saudi Arabia, is the latest in a series of seaborne assaults by Yemeni rebels amid the Israel-Hamas war) also still blindly supporting and whitewashing its terrorism as a crooked wind. This is an insane perversion of ethics and morality. But if this continues, I am afraid that it will ultimately hysterically destroy Israeli-Chinese relations and the thousand-year friendship between Jews and Chinese around the world, and even irreversibly drive pro-China, pro-Russian Israel into the U.S. camp and its anti-Chinese alliance, and China will only be blamed for it. The public, on the other hand, should take a comprehensive and objective stance to avoid the pitfalls of racial discrimination and taking sides. At the very least, we, the people of Hong Kong, need only to be cautious and understanding and civilized, not politicized, because neither Israel nor the Palestinian territories are the enemies of Hong Kong. Similarly, neither Ukraine nor Russia was Hong Kong's enemy in the Russo-Ukrainian War. At least there is no need to take a hostile stance. What is strange is why the Hong Kong media and the trashy politicians of this island have to make the public hate and take sides. In the era of multilateralism, the way and principle not to jeopardize diplomatic relations is, first and foremost, not to take sides.
▪️ 以色列國防軍作戰的一向鮮明的特色之一是，一貫自覺地先炸毀敵方可利用的高樓大廈（地理上佔優勢的高處），以便進行陸上行動並確保士兵的陸上優勢，而非港媒和無知‘專家’所報導的胡亂轟炸建築物。甚至，客觀地看，面對人盾和人肉炸彈威脅毫無畏懼地進攻和一舉摧毀淪為恐怖主義基地的平民設施是個準確的軍事戰術。如此最大降低了以色列國防軍本身的死傷率，完全合乎提高軍事作戰的效率。誠然，不僅烏克蘭，台灣面對強敵都會採取類似哈瑪斯戰術(地道戰術/tunnel warfare)時，不難預測解放軍也就不可避免地不得不採取類似以方的戰術。如上篇所述，後來以色列國防軍逐一炸毀了哈瑪斯的地道，而並未冒險深入其中（Israel Says Gaza Assault Has Entered the Next Stage as New Warning Is Issued for Civilians），這類似普京指示俄軍不得冒險深入馬里烏波爾亞速鋼鐵廠（Azovstal Iron and Steel Works）地道網絡也屬於同樣的軍事學道理，也完全合乎軍事法則的專業行動。
One of the distinctive features of the IDF's warfare has always been that it has always consciously blown up high buildings (geographically advantageous heights) that the enemy could use first in order to carry out land operations and ensure the soldiers' superiority on land, rather than indiscriminately bombing buildings, as reported in the Hong Kong media and by ignorant 'experts'. Even objectively, it is an accurate military tactic to attack without fear in the face of human shields and the threat of human bombs and to destroy civilian facilities that have become terrorist bases in one fell swoop. This minimizes the casualty rate of the IDF itself and is entirely consistent with increasing the efficiency of military operations. Admittedly, if not only Ukraine but also Taiwan adopt Hamas-like tactics (tunnel warfare) against a powerful enemy, it is not difficult to predict that the PLA would inevitably be forced to adopt similar tactics as the Israelis. As mentioned in the previous article, the IDF later blew up the Hamas tunnels one by one without venturing deeper into them (Israel Says Gaza Assault Has Entered the Next Stage as New Warning Is Issued for Civilians), it would seem that Putin's instruction to Russian troops not to venture deeper into the tunnels of the Azovstal Iron and Steel Works in Mariupol falls under the same military doctrine, and is perfectly in keeping with the military code of professional conduct.
IDF: “There’s a positive ID on an enemy inside the shaft, I’ve thrown a grenade. Target likely eliminated”: the 188th Brigade in close-quarter combat with a terrorist firing from a tunnel shaft. ("確認竪井內有敵人，我已投擲手榴彈。目標可能已被消滅"：第 188 旅正在與一名從隧道竪井中開火的恐怖分子進行近距離戰鬥)
IDF: "We launched a rapid, powerful, and focused operation, moving from tunnel to tunnel, from house to house"; step by step, this is how the 98th Division is operating in Khan Yunis. （"我們發起了一次快速、有力和有重點的行動，從一個地道到另一個地道，從一戶到另一戶"；這就是第 98 師在汗尤尼斯一步步開展行動的方式）
如上所述，從以色列國防軍的作戰初始到現在，都根本看不到與嚴格軍事作戰的規律脫節的，偽學者們散播的所謂胡亂掃射的種族清洗，猶太教，猶太復國主義，殖民主義，極右派等等簡單方便的膚淺政治標籤，根本看不到此類東西和表象在發揮實際作用。不但偽學者們把政治標籤丟給以色列國防軍而已，同時也根本沒有抓住以色列國防軍作戰的概念及其輪廓。換言之，這純是一個先進正規軍如何應對恐怖主義游擊隊的地道戰術的問題及其脈絡，因此那些不恰當的標籤都毫無實際內容可言。
As mentioned above, from the very beginning of the IDF's operations to the present day, there has been no visible detachment from the strict rules of military warfare, and the simple and convenient shallow political labels of ethnic cleansing, Judaism, Zionism, colonialism, the far-right, and so on, spread by pseudo-scholars, have not seen such things and appearances in action at all. Not only do pseudo-scholars throw political labels at the IDF, but they also fail to grasp the concept of the IDF's war and its contours. In other words, it is purely a question of how an advanced regular army responds to the tunnel tactics of the terrorist guerrillas and their veins, and therefore, all those inappropriate labels have no real substance to them.
▪️ 2023年12月5日，有報導指："就在襲擊發生之前，特拉維夫證券交易所（TASE）上以色列證券的賣空交易急劇增加，"教授們在長達 66 頁的報告中寫道。
研究報告的作者之一米茨說："這極不尋常，" 他補充說，僅一家以色列公司的股票賣空就獲利近 90 萬美元。
另一個有據可查的例子是，9 月 14 日至 10 月 5 日期間，以色列最大的銀行雷米（Leumi） 的 443 萬股股票被賣空，獲利 32 億謝克爾（約合 8.62 億美元）。襲擊發生後，雷米銀行的股價在 10 月 8 日立即下跌了近 9%。
研究人員總結道：綜合來看，我們的證據與知情交易者預期哈馬斯發動襲擊並從中獲利是一致的。
教授們發現，10 月初的賣空活動 "超過了許多其他危機時期的賣空活動"。
以色列證券管理局表示，它正在調查美國研究人員的發現，並補充說 "該局已瞭解此事，有關各方正在進行調查"。
"……And just before the attack, short-selling of Israeli securities on the Tel Aviv Stock Exchange (TASE) increased dramatically," the professors wrote in their 66-page report.
"That's extremely unusual," said Mitts, one of the authors of the study, adding that shares sold short for one Israeli company alone yielded a profit of nearly $900,000.
In another documented example, 4.43 million shares in Leumi, Israel's largest bank, were sold short between September 14 and October 5, yielding profits of 3.2 billion shekels ($862 million). Leumi's share price dropped by almost 9% on October 8 in the immediate aftermath of the attack.
"Taken together, our evidence is consistent with informed traders anticipating and profiting from the Hamas attack," the researchers concluded.
The professors found that the short-selling activity in early October "exceeded the short-selling that occurred during numerous other periods of crisis."
The Israel Securities Authority said it was looking into the findings of US researchers, adding that "the matter is known to the authority and is under investigation by all the relevant parties."
[…] Short selling is aimed at making a profit on an asset that is expected to drop in price. The seller "borrows" a security and sells it on the open market with the goal of buying it back later at a lower price and pocketing the difference. （賣空的目的是在預期價格會下跌的資產上獲利。賣方 "借入"證券並在公開市場上賣出，目的是日後以更低的價格買回，並將差價收入囊中）
「沽空」是指你在出售股票時，並無持有該股票，但對有關股票擁有一項即時可行使而無條件的售賣權利。然而，並非所有股票均可沽空。
Simply speaking, "short selling" refers to the sale of a stock which you do not own at the time of selling but you have a presently exercisable and unconditional right to sell it. However, not all stocks can be short sold.
香港法例禁止任何人出售本身並無持有的股份，除非你在出售時擁有，或誠實並合理地相信自己擁有一項即時可行使而無條件的售賣權利 (例如擁有相關股份的期權、權證或可換股票據)。
較普遍的做法是在落盤沽空前，你與持有股份的人士訂立有效的股份借貸協議，並取得借出股份一方的確定，備有足夠數量的股份可供借用。你可要求經紀行作出這項安排，但借出股份的經紀行，作為風險管理的措施之一，必須要求客戶提供至少相等所借股份市值 105% 的抵押品。這借貸安排可確保在沽空時，你已取得所沽空的股份須擁有的權利，並能夠於交收日 (T+2) 完成交收。
Selling a stock that you do not own is prohibited under the Hong Kong laws. The only exception is if, at the time of the sale, you honestly believe that you have a presently exercisable and unconditional right (such as the holding of options, warrants or convertible notes in the stock) to sell the stock.
A common practice is to enter into a valid stock borrowing arrangement with an existing holder of the stock and ensure that the stock lender has adequate shares to lend before placing a short sale. You can ask your brokerage to arrange this. However, for risk management purposes the brokerage lending the stock would ask for collateral of at least 105% of the value of the stock borrowed. The stock borrowing arrangement ensures that when the short sale is made, you have already acquired the right to the stock and will be able to settle for it on T+2.
所謂賣空（short-selling），在港稱呼沽空（short-selling）。沽字同時意味著買賣，在此即賣的意思。甚至，每次大型社會事件發生時總是看到了所謂國際金融大鱷的沽空行為。上一次較顯著的是2019年的反修例風波期間。
Even the short-selling behavior of the so-called international financial crocodiles is always seen every time a major social event occurs. The last time it was more noticeable was during the anti-amendment storm in 2019.
香港示威活動及警民衝突持續，著名對冲基金經理、美國海曼資本（Hayman Advisors）創辦人巴斯（Kyle Bass）表示，隨著連串反修例示威活動暴力升級，預期香港經濟將會嚴重下滑。巴斯在阿姆斯特丹的一個會議上表示，香港經濟流動性正在乾涸，預計香港外匯儲備狀況將會於9月及10月惡化，而大量資本和投資資金亦會在未來12個月至18個月外流。巴斯是美國最知名的基金經理之一，有「中國大淡友」以及「沽空之王 」之稱。他在2005年創建了自己的基金「海曼資本」。
The Hong Kong demonstrations and police clashes continue. The famous hedge fund manager, United States Hayman Capital (Hayman Advisors) founder Kyle Bass (Bass) said, with the series of anti-amendment demonstrations escalating, it is expected that Hong Kong's economy will have a serious downturn.
Bass said at a conference in Amsterdam, Hong Kong's economic liquidity is drying up, that that is expected Hong Kong's foreign exchange reserves position will deteriorate in September and October, and a large amount of capital and investment funds will also be outflowed in the next 12 months.
Bass is one of the best-known fund managers in the United States, known as the "Greatest Short Seller in China" and the "King of Short Selling". He founded his own fund, Hayman Capital, in 2005.
重點是，香港發生的沽空行為，並非所有的沽空行為都屬違法的（只有指定證券可沽空）。這類規矩不能被搞錯。甚至，在那些社會危機時發生的大型沽空行為都跟以色列-哈瑪斯戰爭正相反，港版沽空都發生在該社會事件已爆發後的期間。這是顯然不同的。換言之，事前知曉社會衝突事件發生日期的幕後黑手們集體預謀搞知情交易（informed trade）的痕跡在港尚未成立。而在以色列-哈瑪斯戰爭上則已成立。此外，重要的法律要求則是反正，沽空者都必須呈報，否則犯法，構成刑事罪行。
The point is that not all short selling that occurs in Hong Kong is illegal (only short selling of designated securities is legal). Such rules cannot be mistaken. Even the large-scale short selling that occurs in times of social crisis is the opposite of the Israeli-Hamas war, where the Hong Kong version of short selling occurs in the period after the social event has already occurred. This is clearly different. In other words, there is no trace of informed trade in Hong Kong by those behind the scenes who knew the date of the social conflict beforehand. It was established in the Israeli-Hamas war. In addition, an important legal requirement is that short sellers must report their short sales anyway, or else they commit a criminal offense.
知情交易揭示的幕後黑手的概念
有一個致命的普遍盲點要指摘的是，所謂幕後黑手並不限於屬於衝突雙方，或可不屬於衝突雙方政治立場的人士。實際上，幕後黑手們可以是第三者。意思是說，理所當然地，衝突雙方都有金主及其精神領袖，但幕後黑手們可保有與它所利用的衝突雙方截然不同的事件定義。換言之，終極幕後黑手們可以是在大脈絡上，就長期和歷史諸階段之間來看，只不過消費特定衝突雙方而已。其事件定義也可以只不過是沒有具體內容的他們的‘投機機會’之一。這可以跟衝突雙方的理想，熱情，以及事件定義完全不同。因此，目前本港某些建制單位一昧把特定民主派人士（衝突一方）當作簡單的正式幕後黑手來了事是個危險的‘錯誤’。
所謂社會衝突事件可以有兩大定義，即衝突雙方各自的定義（該事件是什麼以及如何發生的），以及屬於第三者的幕後黑手們的定義（該事件是什麼以及如何發生的）。在反修例風波上，目前市民只知道前者而已。
譬如，對民主派而言，反修例運動是一場嚮往民主，人權，自由的，充滿熱情和政治理想的社會運動，而對中共而言，是場五眼聯盟的顏色革命（不過，紐西蘭並未參與佔中和反修例）。然而，對於把民主派當作代罪羔羊的真正的幕後黑手們而言，只不過是在建制上長期釀成土壤和條件的政治投機的一場劇場節目而已。
有趣的是，在根本無法排除作為第三者的幕後黑手們的存在之際，建制一昧排除和埋葬其反對可能性的理據仍是匱乏的。香港的反修例風波確實有身為第三者的幕後黑手們。但這個意思跟衝突雙方所設想的定義不同。所以中共強迫接受特定一方的‘政治正確’定義是十分危險的。
關於哈瑪斯2023年10月7日恐怖襲擊以色列並大量綁架平民的事件之知情交易，兩位美國學者Joshua Mitts和Robert J. Jackson, Jr.在一個月前，2023年12月4日發表了長篇論文，名為Trading on Terror? （在恐襲上進行交易？）。
The Concept of Behind-the-Scenes as Revealed by Informed Trading
There is a fatal general blind spot to point out that the so-called masterminds are not limited to those who are on either side of the conflict, or those who may or may not be in conflict with the political positions of either side. In fact, the masterminds could be third parties. It means that, of course, both sides of the conflict have money-makers and their spiritual leaders, but the masterminds can maintain a very different definition of events from the side of the conflict that they are exploiting.
In other words, the ultimate masterminds can be simply consumers of specific parties to the conflict, in the grand scheme of things, over time and across stages of history. The definition of the event can also be nothing more than one of their 'speculative opportunities' with no specific content. This can be completely different from the ideals, passions, and event definitions of the conflicting parties. Therefore, it is a dangerous 'mistake' for some in the local establishment to dismiss specific HK democrats (one of the parties to the conflict) as simply the official masterminds of the conflict.
A social conflict can be defined in two ways, namely, by the respective definitions of the two parties to the conflict (what the incident is and how it happened), and by the definition of those who are behind the incident as third parties (what the incident is and how it happened). In the anti-amendment storm, the public only knows the former.
For example, to the HK democrats, the anti-amendment movement is a social movement that yearns for democracy, human rights and freedom, full of passion and political ideals, while to the CCP, it is a color revolution of the Five Eyes (yet, New Zealand did not take part in the Occupy and anti-amendment movement). However, for the real masterminds who made the HK democrats the scapegoats, it is just a theatrical show of political speculation that has been brewing in the soil and conditions in the establishment for a long time.
It is interesting to note that the establishment's rationale for ruling out and burying the possibility of opposition, when the existence of a third party behind the scenes cannot be ruled out at all, is still lacking. It is true that there are third parties behind the scenes in the anti-amendment storm in Hong Kong. But this means something different from what the two conflicting parties think it means. So it is dangerous for the CCP to force the definition of 'political correctness' to be accepted by a particular party.
Two American scholars, Joshua Mitts and Robert J. Jackson, Jr., published a long paper a month earlier, on December 4, 2023, on the informed trading about the October 7, 2023 terrorist attack on Israel and the mass kidnapping of civilians by Hamas, entitled Trading on Terror?).
筆者在繁忙之際熟讀了該篇論文。有幾個重點：
1. 分析知情交易也跟分析幕後黑手一樣，必須要看大脈絡，以前或之後發生的些事件以及在那些事件上的資本表態來做對比，不能只看以色列-哈瑪斯戰爭期間。兩位學者確實做到了這點。
2. 因為沽空牽涉持股者，經紀公司，沽空者的多層次結構，所以兩位學者只能證明和指摘知情交易發生的事實和輪廓，而非揪出沽空者的身分。這是合理的。
3. 因為沽空者太熟悉哈瑪斯襲擊以色列的特定日期，並預謀大量沽空的痕跡顯示沽空者最大可能是哈瑪斯恐怖主義組織及其金主們。這與一般人的想像不同，他們跟時常投資不少以色列公司的投資者有聯繫或從此獲利。這可謂恐怖主義勢力吃以巴雙方的血饅頭。這不利於哈瑪斯及其恐怖主義盟友們的敘事。
以下，引用一些重要的部分，以供參考。
The author has familiarized himself or herself with the paper in his or her busy schedule. There are a few key points:
1. Analyzing informed trading is the same as analyzing the masterminds behind the curtains. We must look at the big picture, the events that happened before or after, and the positions on those events to make comparisons, not just during the Israeli-Hamas war. The two scholars have indeed done so.
2. Because short selling involves a multi-layered structure of shareholders, brokers, and short sellers, the two scholars can only prove and point to the facts and contours of the informed transactions, rather than identifying the short sellers. This is reasonable.
3. Because the short sellers were all too familiar with the specific date of the HAMAS attack on Israel, and the traces of premeditated short selling indicate that the short sellers were most likely HAMAS terrorist organizations and their financiers. Contrary to popular belief, they are connected to or profit from investors who often invest in many Israeli companies. This is what one might call a terrorist force eating Israeli-Palestinian blood buns. This does not help the narrative of Hamas and its terrorist allies.
Here are some important quotes for your reference.
🔻 NEWS / FACTs 【事實關係】
▪️ Recent scholarship shows that informed traders increasingly disguise trades in economically linked securities such as exchange-traded funds (ETFs). Linking that work to longstanding literature on financial markets’ reactions to military conflict, we document a significant spike in short selling in the principal Israeli-company ETF days before the October 7 Hamas attack. The short selling that day far exceeded the short selling that occurred during numerous other periods of crisis, including the recession following the financial crisis, the 2014 Israel-Gaza war, and the COVID-19 pandemic. Similarly, we identify increases in short selling before the attack in dozens of Israeli companies traded in Tel Aviv. For one Israeli company alone, 4.43 million new shares sold short over the September 14 to October 5 period yielded profits (or approximates avoided losses) of millions on that additional short selling for one out of hundreds of securities traded on the TASE. Although we see no aggregate increase in shorting of Israeli companies on U.S. exchanges, we do identify a sharp and unusual increase, just before the attacks, in trading in risky short-dated options on these companies expiring just after the attacks. We identify similar patterns in the Israeli ETF at times when it was reported that Hamas was planning to execute a similar attack as in October. Our findings suggest that traders informed about the coming attacks profited from these tragic events, and consistent with prior literature we show that trading of this kind occurs in gaps in U.S. and international enforcement of legal prohibitions on informed trading. We contribute to the growing literature on trading related to geopolitical events and offer suggestions for policymakers concerned about profitable trading based on information about coming military conflict.
▪️ On October 7, 2023, Hamas launched a devastating terrorist attack on Israel, a tragedy with consequences we are only beginning to comprehend. But days before the attack, traders appeared to anticipate the events to come. On October 2, short interest in the MSCI Israel Exchange Traded Fund (ETF) suddenly, and significantly, spiked. And just before the attack, short selling of Israeli securities on the Tel Aviv Stock Exchange increased dramatically. While many investigating how the Hamas attack was financed have focused on cryptocurrency (Adayemo (2023)), to our knowledge little attention has been given to trading in securities markets in advance of October 7—an important omission given the relative sizes of the cryptocurrency and securities markets. (p.1)
▪️ This Article addresses that gap by studying trading in the MSCI Israeli ETF and Israeli companies listed both in the United States and on the TASE in the days before the Hamas attack. We contribute three important findings to the longstanding literature on how financial markets respond to military conflict (Leigh, Wolfers & Zitzewitz (2003); Poteshman (2006)), as well as more recent work on how informed traders transact in shadow securities—that is, securities economically linked to firms affected by the information (Mehta, Reeb & Zhao (2021)), such as ETFs (Eglite, Staermans, Patel & Putnins (2023)). (p.3)
▪️ While we cannot say what the source of this unusual short selling was, the evidence we present is consistent with substantial block trades that occurred on October 2 rather than ordinary market-making activity.
In addition, we identify similar patterns in the Israeli ETF in April 2023, when it was reported that Hamas was planning to execute a similar attack as in October. Specifically, short volume in EIS peaked on April 3 at levels very similar to those observed on October 2, and was far higher (by an order of magnitude) than other days prior to April 3. (p.4)
▪️ Taken together, this evidence strengthens the interpretation that the trading observed in October and April was related to the Hamas attack rather than random noise. (p.5)
▪️ …trading motivated by private information about value-destroying activities.
(p.7)
▪️ …what they call “abnormal trades” in option markets (i.e., trades not driven by liquidity motives). (p.8)
▪️ More recent work has considered whether informed traders seeking to evade detection are likely to transact not in the security that is the subject of the information but instead in “shadow” securities that are economically linked to firms affected by the information. (p.10)
▪️ As Figure 1 shows, short volume peaks on Tuesday, October 2, just days before the attack. The peak is so high—over 200,000 shares—that it is difficult to see the other values in the chart, which rarely exceed the single digit thousands. A natural question is whether this peak was offset by other purchase volume by market makers that same day. The following figure plots short volume as a percentage of total volume reported to FINRA (the “Short Ratio”): (p.13)
▪️ Second, a short sale is generally settled (i.e., shares are delivered from the short seller to the purchaser from the short seller) by borrowing shares from that lender. (p.16)
▪️ This evidence is a further indication that the short sales identified in the prior section did not reflect market making in response to buying demand—because market makers likely would have offset their short exposure by purchasing shares that same day. (p.17)
▪️ In addition, the average duration of short positions was sharply increasing in the weeks leading up to the Hamas attack.
These appear to be the short sales identified previously. On these two transactions alone, the trader made several million dollars in profit (or in losses avoided). (p.18)
▪️ This figure plots utilization in EIS over the calendar year 2023. The spikes in early 2023 occurred during the period of turmoil accompanying the Israeli judicial reform, and the spike in July 2023 occurred after the reform was enacted. Figure 6 shows that while short selling volume and ratios on October 2 were exceptionally high, there were other peaks in utilization that occurred above the level on October 2. It is worth noting that the spikes in early 2023 occurred during the period of turmoil accompanying the Israeli judicial reform, and the spike in July 2023 occurred after the reform was enacted. Either way, the utilization levels observed in early October 2023 were exceptional relative to the full historical time series of utilization.
(p.21)
▪️ It has been reported that Hamas had initially planned these attacks to occur on the eve of
Passover, which was April 5, 2023. The Times of Israel reported that:
Hamas had initially planned its October 7 cross-border onslaught for the eve of Passover, but cancelled the attack after Israel raised the alert level, according to a Saturday report. Military intelligence caught the early signs of an attack on Passover, which this year fell on April 5, and raised the alert, leading Hamas to cancel and the IDF to consider the incident a false alarm, Channel 12 reported, citing unnamed soldiers in the IDF’s 8200 signal intelligence unit.13. As noted previously, short volume in EIS peaked on April 3 at levels very similar to those observed on October 2, and was far higher (by an order of magnitude) than other days prior to April 3: (p.22）
▪️ As Figure 8 shows, there is no systematic relationship between the prior change in short volume and the one-week forward return to EIS. That makes the findings in early October, prior to the Hamas attacks, even more surprising, because a trader would not rationally expect to profit merely by the presence of increased short volume in EIS. (p.25)
▪️ When considering the short ratio, October 2 ranks at position number 15, or above the 99.5%-quantile in rank-order. This indicates that it is extremely unlikely that the volume of short selling on October 2 occurred by random chance. Moreover, it indicates that the short selling that day far exceeded the short selling that occurred during numerous other periods of crisis, including the recession following the financial crisis, the 2014 Israel-Gaza war, and the COVID-19 pandemic.
(p.26)
▪️ A call option is a contract that gives the holder the right (but not the obligation) to purchase shares of stock at a given price (known as the “strike price”) by a given date (known as the “expiration” date. A put option is a contract that gives the holder the right (but not the obligation) to sell shares of stock at a given price (known as the “strike price”) by a given date (known as the “expiration” date).
Israeli markets end trading on Thursdays, rather than Fridays. After we posted an initial draft of this article, TASE officials pointed out that the draft described the magnitudes of our findings in units of NIS rather than agorot, the currency in which TASE trades occur. We have revised the draft accordingly. We appreciate TASE’s engagement with our study and welcome further feedback.
In some of these cases, the increases in short interest were quite pronounced. For
example, Bank Leumi, one of the largest banks in Israel and a large constituent in the EIS exchange-traded fund, saw an increase of nearly 50% in short interest from September 14 to October 5, from 8.9 million shares to nearly 13.4 million shares. (p.30)
▪️ As Figure 12 shows, while the two groups show similar levels of open interest earlier in September, the two trends begin to diverge dramatically in the period leading up to the Hamas terrorist attack. The difference is economically meaningful in magnitude, … (p.33)
▪️ It is useful at this juncture to compare these results to what might be obtained if we were to replicate this analysis for options expiring substantially in advance of the Hamas attack. To be sure, informed traders may not have been aware of the precise timing of the attack, thus potentially leading to the purchase of options expiring in just before the attack. Indeed, we find similar (albeit weaker) patterns for options expiring October 6 and to a lesser extent for those expiring on September 29. However, they would not make the same magnitude of a risky bet on options expiring after a non-event. (p.36)
▪️ While the literature on informed trading (e.g., Kyle (1985)) suggests that informed traders are likely to attempt to disguise their trading in liquid markets, options markets are relatively illiquid, so it can be advantageous to arrange a large block trade with a market maker at a competitive price rather than crossing a large bid/ask spread.20 (pp.37-38)
▪️ Second, as a normative matter we consider whether law should regulate the kind of trading observed here.
As the table shows, there were some large block trades in short-dated put options on Israeli companies. (p.38)
▪️ Federal securities law does not, of course, generally proscribe informed trading, favoring instead the information- and price-discovery enhancements such trading generates (Goshen & Parchimovsky (2006)). (p.39)
▪️ For one thing, its requirement of a predicate breach of fiduciary duty or deception, often by a corporate insider trading against her own company’s investors, will often be unmet in cases involving information about coming military conflict. (p.39)
▪️ In sum, federal securities law is generally ill-suited to regulating informed trading that anticipates future terrorist attacks.
For example, as noted above Poteshman (2006), Thompson & Teh (2011) and Chesney, Crameri & Mancini (2015) document abnormal trades in option markets prior to the terrorist attacks on September 11, 2001.
Previous literature identifies two kinds of shadow trading: first, trading in the shares of specific companies economically linked to the performance of a company about which the trader has information (Mehta, Reeb & Zhao (2021)), and second, trading in an ETF based on information about one of the ETF’s constituent companies (Eglite, Staermans, Patel & Putnins (2023)). For another, the kind of informed trading on future armed conflict we identify here is an especially elusive target for U.S. securities law because much of it, such as in the Israel ETF, occurs as “shadow” trading raising additional enforcement challenges. (p.40)
▪️ As Figure 19 shows, there was no increase in utilization (short interest) immediately prior to the judicial reform on July 24, 2023. Both utilization and average short duration were basically flat from the end of June through the end of July. (p.67)
Source: Jackson, Jr., Robert J. and Mitts, Joshua, Trading on Terror? (December 4, 2023). Available at SSRN: https://ssrn.com/abstract=4652027 or http://dx.doi.org/10.2139/ssrn.4652027
🔻 COMMENT 【評語】
知情交易者要麼是直接的策劃者，要麼是與策劃者直接相關的金融實體。因此，他們屬於一般策劃者的範疇。
這裡就這一主題設立了幾個類別：
知情交易與政治動亂、顏色革命；知情交易與黑客攻擊；知情交易與恐怖主義；知情交易與軍事行動；交易利潤可能為非法黑客攻擊提供資金。
此外，這些類別被全球範圍的反猶太歇斯底里情緒系統地、技術性地掩蓋了。
Informed traders are either direct masterminds or financial entities that directly related with masterminds. Thus, they are in the category of masterminds in general.
There are several categories established here on the topic:
Informed trading and political unrest, color revolutions; Informed trading and hacking; Informed trading and terrorism; Informed trading and military operations; trading profits could finance illicit hacking.
Moreover, these categories are systematically and technically buried by the anti-Semitic hysteria of the global magnitude.
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