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.

Table of Contents

• Preface
• Acknowledgments
• About the Editor
• Contributor Bios
• Section 1 Goldman Sachs and Regulation in the United States and Canada
• Short Sales and Financial Innovation: How to Take the Good While Avoiding Widespread Default- Graciela Chichilnisky
• The Goldman Sachs Swaps Shop: An Examination of Synthetic Short Selling through Credit Default Swaps and Implications of Securities and Exchange Commission v. Goldman Sachs & Co., et al.- Edward Pekarek and Christopher Lufrano
• Off-Shore Short Sales after Morrison:Will the Securities and Exchange Commission Be Emboldened or Constrained?- Edward Pekarek and Soufiane Cherkaoui
• Regulating Short Sales in the 21st Century- Houman B. Shadab
• Evolution of Short Selling Regulations and Trading Practices- Chinmay Jain, Pankaj K. Jain, and Thomas H. McInish
• Financing Techniques for Short Sellers- Stuart McCrary
• A Survey of Short Selling in Canada- Camillo Lento and James Kozyra
• Section 2 European Markets
• Are Restrictions on Short Selling Good? A Look at European Markets- Mohamed El Hedi Arouri, Fredj Jawadi, and Duc Khuong Nguyen
• Short Selling, Clearing, and Settlement in Europe: Relations and Implications- Daniela Russo and Simonetta Rosati
• The 2008 Emergency Regulation of Short Selling in the United Kingdom, United States, and Australia- Kym Sheehan
• Reflections on Short Selling Regulations in Western and Eastern Europe- Jeannine Daniel and François-Serge Lhabitant
• Regulating Short Selling: The European Framework and Regulatory Arbitrage- Giampaolo Gabbi and Paola Giovinazzo
• Do Option Prices Reveal Short Sale Restrictions Impact on Banks’ Stock Prices? The German Case- Stefano Corradin, Marco Lo Duca, and Cristina Sommacampagna
• Short Selling in France during the Crisis, the Bans, and What Has Changed since the Euro Correction- Emmanuel Fragnière and Iliya Markov
• Section 3 China, Japan, and Australia
• The Chinese Real Estate Bubble: Is It an Opportunity for Short Selling?- Peter T. Treadway and Michael C.S. Wong
• Introduction of Margin Trading and Short Selling in China's Securities Market: The Case of Disordered Warrant Prices- Wei Fan, Qingbin Meng, Liu Yang, Lingqing Xing, and Sihai Fang
• Impact of Short Selling on China Stock Prices- Kaiguo Zhou and Michael C.S. Wong
• Short Selling the Real Estate Bubble in China- Kaiguo Zhou
• Impact of Macroeconomic Indicators on Short Selling: Evidence from the Tokyo Stock Exchange- M. Nihat Solakoglu and Mehmet Orhan
• New Regulatory Developments for Short Selling in Asia: A Review- Jeannine Daniel and François-Serge Lhabitant
• The Signaling of Short Selling Activity in Australia- Mathew J. Ratty, John L. Simpson, and Peter D. Mayall
• Sourcing Securities for Short Sales: The Proper Legal Characterization of Securities Loans- Paul U. Ali
• Section 4 Emerging Markets
• Short Selling in Emerging Markets: A Comparison of Market Performance during the Global Financial Crisis- Mario Maggi and Dean Fantazzini
• Short Selling and the Problem of Market Maturity in Latin America- Miguel Díaz-Martínez and Emmanuel Fragnière
• Short Selling—The Ambrosia or Kryptonite of Emerging Markets?- Edward Pekarek and Maryam Meseha
• Short Selling Consistency in South Africa- David E. Allen, Robert J. Powell, and Abhay K. Singh
• Short Selling in Russia: Main Regulations and Empirical Evidence from Medium- and Long-Term Portfolio Strategies- Alexander Kudrov, Andrew Zlotnik, Elena Dukhovnaya, and Dean Fantazzini
• Section 5 Portfolio Management and Performance
• Performance Persistence of Short-Biased Hedge Funds- Meredith Jones
• An Empirical Analysis of Short-Biased Hedge Funds’ Risk-Adjusted Performance: A Panel Approach- Greg N. Gregoriou and Razvan Pascalau
• Short Selling by Portfolio Managers: Performance and Risk Effects across Investment Styles- Russell B. Gregory-Allen, David M. Smith, and Mark Werman
• Short Selling in an Asset Allocation Framework—The Search for Alpha- Nils S. Tuchschmid, Erik Wallerstein, and Sassan Zaker
• Machine Learning and Short Positions in Stock Trading Strategies- David E. Allen, Robert J. Powell, and Abhay K. Singh
• Short Selling Stock Indices on Signals from Implied Volatility Index Changes: Evidence from Quantile Regression-Based Techniques- David E. Allen, Abhay K. Singh, Robert J. Powell, and Akhmad Kramadibrata
• Section 6 Modeling, Earnings, and Announcements
• Short Selling and the Equity Premium Puzzle- Jørgen Vitting Andersen
• Affine Term Structure Models and Short Selling: The Liberal Case against Prohibitions- Vicente Jakas
• Short Sale Constraints in the Equity Market and the Term Structure of Interest Rates- Abraham Lioui
• Short Selling Assessment Where Consumer Prices Involve Both Currency Trades and Weather Shocks- Jack Penm and R. Deane Terrell
• Aggregate Short Selling during Earnings Seasons- Paul Brockman, Andrew Lynch, and Andrei Nikiforov
• The Information Content of Short Selling before Macroeconomic Announcements- Paul Brockman and (Grace) Qing Hao