Right Before Hamas Attacked Someone Shorted Israeli Stocks And Funds

December 4, 2023

The Israeli Haaretz headlines:

Did Hamas Make Billions Betting Against Israeli Shares Before October 7 Massacre?
Giant gambles against Israel on the markets in Tel Aviv and Wall Street days before Hamas’ attack made billions. Somebody seems to have known about the plan in advance

The story is unfortunately pay-walled and I have yet to find an archive version of it. An archived version is now available.

We know that Batteridge's law of headlines says:

Any headline that ends in a question mark can be answered by the word no.

It was thereby not Hamas which profited from unusual short positions but likely someone else.

The Haaretz story is based on a very recent study by two law professors with experience in market regulations from New York University and Columbia University.

A PDF file of the study, Trading on Terror?, is available at the Haaretz site.

Its abstract says:

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 3.2 billion NIS on that additional short selling. 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 on the basis of information about coming military conflict.

3.2 billion New Israeli Shekel are about $800+ million. And, as I understand it, those only were the profits from a small part of the whole operation.

I am not qualified sufficiently to judge the study but the quoted sources and data seem reasonable.

EIS is an exchange-traded fund that tracks Israeli shares in New York. The spike in shorts volume of EIS was indeed hefty.

bigger

The short options were only for a very limited period. At least some would have expired on October 13.

So it definitely looks as if on Monday, October 2, someone was sure enough on that soon something 'bad' would happen to Israel. That someone had enough market knowledge and money to take the risk of a false alarm in exchange for a huge potential profit.

Who that person or group was is for anyone to guess.

Posted by b on December 4, 2023 at 15:42 UTC | Permalink

Comments

And of course markets don’t keep accurate records of all trades so there is no way the authorities can identify the parties and take action against them such as reversing the trades.

Posted by: Ghost Ship | Dec 5 2023 2:06 utc | 101

“Many here do agree with and do not bat an eye when China forces its Muslims into political reeducation.”
Posted by: NemesisCalling | Dec 4 2023 23:59 utc | 86
Your idea seems rational , however, measured against historical context it fades miserably.
One must remember that the Han Chinese culture is 4,000 years old or so year old and they have endured because over everything else they value ‘stability’.
The Uyghurs are essentially of Mongolian stock located in NW China.
In the 13th century the Mongols displaced the Han Chinese dynasty of the Song dynasty. The now ascendant Mongols were militarily aggressive attempting to conquer Japan inter alia.
Over the centuries many of the Uyghurs became Muslim.
In the late 20th century and the early 21 st century MI6 and the CIA attempted to lure the Uyghur Muslims into radical Wahhabism as a thorn in the Chinese back.
The Han Chinese countered with a re-education program to ‘brainwash the brainwashed.”
I don’t have a problem with that

Posted by: canuck | Dec 5 2023 3:40 utc | 102

Posted by: bevin | Dec 4 2023 18:46 utc | 49
Poor migrants crawling over the Mexican border aren’t doing it for fun and their coming to the US is not coincidental: most of them are victims of imperialist aggression in one form or another, they arre like most first generation immigrants hard working, courageous and desperate. They deserve our respect.
And now a short prayer: “God Damn all fascists and enemies of the poor”.
HA HA HA HA HA!!
I finally got it! Apologies for being so slow.
bevin is a communist-programmed AI bot!
Posted by: Scorpion | Dec 5 2023 0:20 utc | 87
Scorpion I treasure both of yours and bevin’s posts-whether I agree with the specific points, made respectively, is irrelevant.
For you, as talented rhetorician to resort to ‘trashing’, trivializing your political opponent’s ideas with such drivel diminishes both your and his eloquent respective points.

Posted by: canuck | Dec 5 2023 3:46 utc | 103

Thanks b. I had never heard of Batteridge’s law of headlines, and I didn’t click on the link but I have to assume it’s relatively recent (e.g., in the last 25 – 30 years). The reason I say so is that this law has never applied to sports or celeb/tabloid headlines; question marks leading stories like that were often answered “Yes.” But in the last 30 years, journalism in the West has reached tabloid/sporting levels and at some point the headlines started picking up the question marks common in those areas of reportage. Which says a lot about the corporate western media. They’re no better than gossips and marketing managers for Empire and Capital. Journalistic standards of adversarial coverage are long gone, and it’s amazing how many people – even my age – don’t seem to fucking understand this.

Posted by: Tom_Q_Collins | Dec 5 2023 4:14 utc | 104

So the Zionazis made a financial killing ahead of their October 7 false flag? “Seen it all before, Bob. Seen it all before.”

Posted by: Matthew | Dec 5 2023 4:26 utc | 105

What really matters?
It’s Genocide. Plain & Simple (w/ Craig Mokhiber)
https://www.youtube.com/watch?v=NI46qq4o21g

Posted by: Lavrov’s Dog | Dec 5 2023 5:32 utc | 106

Oh dear, oh dear. tsk tsk:
Yet another reason to deny Isreali vendors in my tender processes based on cyber-risk (“political exposure”):

Multiple federal agencies are warning that Iran-linked hackers have been targeting U.S. water systems and other industries that use programmable-logic controllers (PLC) made by Israeli firm Unitronics, as the Israel–Hamas war simmers in the background.
.
.
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Hackers affiliated with the Islamic Revolutionary Guard Corps (IRGC) have engaged in “malicious cyber activity” targeting PLC operational technology devices used in the U.S. water and wastewater systems sector, and in other industries including energy, food, and beverage manufacturing, since at least Nov. 22, the agencies said in a Dec. 1 alert.
The agencies that issued the warning include the FBI, the Cybersecurity and Infrastructure Security Agency (CISA), and the National Security Agency (NSA), with the Israel National Cyber Directorate (INCD) joining in the advisory.
This IRGC-linked cyberattack group (known variously as CyberAv3ngers, CyberAveng3rs, or Cyber Avengers) has been compromising default credentials in Unitronics devices since at least Nov. 22, the agencies said.

(Source: Zerohedge)
Unitronics, huh? Now there’s a stock to short …

Posted by: Arch Bungle | Dec 5 2023 6:34 utc | 107

Just being devils advocate here, but couldn’t Hammas linked entities place the trade themselves?
There would be quite a lot of benefit from this also looking like Israel knew in advance being one…? 🤔

Posted by: Jimmy | Dec 5 2023 7:20 utc | 108

Posted by: bevin | Dec 4 2023 18:46 utc | 49
Poor migrants crawling over the Mexican border aren’t doing it for fun.
Americans better expect their retirement age to keep rising then as their productivity gets trashed.
Pensions are NEVER an affordability story but always a productivity story.
If you want to rachet up competition and productivity to mach 10. Introduce a job guarentee and slash the retirement age to 55 along with a skill based visa immigration policy.

Posted by: Echo Chamber | Dec 5 2023 9:01 utc | 109

When in doubt, the Americans were behind it.

Posted by: Pancho Plail | Dec 5 2023 9:02 utc | 110

@Ed and Turks 152: Instead of insulting me (how pathetic):
For the ETF, LOOK at Figure 4: Short Volume in EIS, 52-Week Period (October 2022 – October 2023).
There are THREE periods with high short volume on the ETF:
1. Highest is in April 2023 when there were huge protests
2. Second highest seems to be in Jan 2023 following judicial reform proposal
3. Oct 2, 2023
What happened Sunday Oct 1, 2023? Hundreds of settlers invaded Al Aqsa following the start of Sukkot on Nov 29. This pattern was repeated every day for the next few days with over 1,100 settler attacking again on Monday.
https://www.aa.com.tr/en/middle-east/over-1-100-israeli-settlers-storm-al-aqsa-mosque-complex-to-celebrate-sukkot/3005663
“On October 2, 2023, we observe two DARK POOL transactions reported to FINRA at 2:46:43pm and 3:21:11pm, for 50,733 and 174,869 shares respectively, at share prices of $54.46 and $54.61, respectively. These appear to be the short sales identified previously.”
The Oct 2 spike in short selling is by INSTITUTIONAL INVESTORS. If you want to allege that Hamas have a command centre at one of the big Israeli banks or hedge funds in Tel Aviv, maybe the Israeli Genocide Forces should bomb those?
I never said, they “screw up regression analysis and decimals”. To their credit, they looked at OTHER TIME PERIODS besides Oct 7 and therefore they have INCONCLUSIVE RESULTS which find a lot of speculative activity around the political risk THROUGHOUT THE YEAR including from Aug to early October when there were huge protests and settler violence was at an all time high.
B wrote “Who that person or group was is for anyone to guess.”. The authors are NOT guessing. The whole paper is on TERRORIST FINANCING. They even manage to slam Russia and China in the paper. Of course it could be a Freudian slip if it is Israeli Institutional Investors themselves who are playing the market.
The paper is not “published in Haaretz”. It is uploaded on SSRN and some idiot from Haaretz who understands nothing about financial research methods has cut and pasted from a press release.
The paper says, “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 3.2 billion NIS on that additional short selling.”. But it does not say how many different investors and transactions were involved over this period. Nowhere does it say that this money accrued to ONE investor.
Ivy League professors are the same clowns who convince the sheeple that negative interest rates on your savings are a good thing. If you hold them in such high esteem why don’t you lend me £1,000 and I promise to pay you back £750 in a week.

Posted by: pq | Dec 5 2023 9:13 utc | 111

For clarity I think the time to give the benefit of the doubt to The West is long over. So I assume all this finger pointing to Hamas & Qatar and so on to be simple, pudding-headed red herrings. Very much like NordStream II and those assinine deflections, I could never take seriously the Western stenographic jackasses pointing and shouting, “Look Over There!” We know it’s someone from the West who gets high level protection, talking around it is playing dumb.
I just think it’s a small, petty fish in the grand schemes (which have been ongoing failures for very long now), and an interesting historic rhyme that forms a ‘tell’ on intelligence shenanigans. I glanced over there on my own time, heard their finger pointing confirm my suspicions about themselves instead, and keep my eye still on these lying Western psychopaths. Walking, gum chewing, fixed baleful stare, all doable at the same time.

Posted by: titmouse | Dec 5 2023 14:34 utc | 112

I don’t think this is about Hamas. My gut tells me that TPTB are planting the idea that ‘bad actors’ are reaping ill-gotten gains from our wonderful free markets by ‘shorting’ based on inside info. And if they had this info, then it must mean they are one of the Bad Guys, and we should obviously seize all their profits immediately lest they benefit from their evil intent…to preserve the integrity of our markets, blah, blah, blah…
Of course they themselves have been doing this for years, it’s where much of the money they’re throwing about has come from. As long as the cheaters were THEIR guys for the most part, well then, folks like Soros were just lucky. And everyone knew the pound was going down hard, so it wasn’t ‘inside info’, just wise investing…(which does beg the question of how he seemed to be the only one to reap such massive profits. Didn’t any of the other deep pocket types see that coming and at least force him to split the jackpot multiple ways? Plenty of other folks profited, but only Soros seems to have made an actual killing.)
But a lot more players have entered the game since then, and some have gotten quite good. Since money is the source of the power, those outflows must be cut off before they threaten the status quo. But you can’t just seize investors gains without destroying your markets, ruining everyone, so you have to set up what you think might be sold as a ‘legitimate reason’.
Enter the “Hamas used our markets to profit off their terrorism!’ battle cry. Yes, the people will scream, SEIZE THOSE PROFITS! And new rules will be made to allow this, which in the years to come will be used to drain countless 401k’s and such of any ‘immoral profits’ that may have accumulated.
“You DO know that XYZ company once retweeted a post calling for a ceasefire, don’t you? Obviously they are anti-semites and support terrorism. And a good chunk of your 401k’s gains come from that company. So, we’ll have to confiscate that. There’ll be no fine…this time. But watch yourself in the future.”
Listen, I don’t want ‘terrorists’ to profit either. But destroying the integrity of your markets to screw with them is pretty stupid. And it looks like they are hell-bent on stupidity.
Hang onto your assets, things are going to get ugly.

Posted by: Bemused Observer | Dec 5 2023 15:47 utc | 113

Posted by: Lathe Biosas | Dec 4 2023 20:42 utc | 65
Generally the transactions are traceable…unless you delete the records, which is apparently what occurred post 9/11 with the Chicago Board Options Exchange according to 9ne whistleblower.

Posted by: Jon_in_AU | Dec 5 2023 18:25 utc | 114

“Generally the transactions are traceable…unless you delete the records, which is apparently what occurred post 9/11 with the Chicago Board Options Exchange according to 9ne whistleblower.”
So it was a Crown Family member that placed that order only for the scheme to be blown by being made public.
Unless the paid the options anyway?
Thomas

Posted by: Thomas | Dec 5 2023 19:06 utc | 115

If stock market funny business around Israeli wars seems familiar, it’s because it is.
Israeli general admits he sold stocks before war
Published August 16, 2006 0
JERUSALEM, Aug 15: Israel’s army chief Dan Halutz offloaded his stock portfolio hours before the Jewish state unleashed a massive offensive in Lebanon and the stock market tumbled, the Maariv daily reported on Tuesday.
Gen Halutz sold the shares at noon on July 12 — three hours after two soldiers were captured by Hezbollah in a cross-border raid and as Israeli artillery began to pound the positions of the militia in Lebanon, the paper said.
Israel’s main TA-25 index slumped by 8.3 per cent over two days from July 12.
Gen Halutz confirmed that he sold his shares for 120,000 shekels (26,000 dollars) and said he lost 5,400 dollars in the transaction.
“It’s true that I sold these shares at noon on July 12, but you can’t link the transaction to the war. At that moment I did not think that there would be a war,” Maariv quoted the army chief as saying.
Israeli media have blasted Gen Halutz for his handling of the war and the lack of preparation by the military for the offensive, with some reports saying that troops lacked basic equipment, like flak jackets, upon being sent in.
Following Tuesday’s report, lawmakers called on Gen Halutz to step down and for Prosecutor General Menahem Mazuz to open an investigation.
“This marks a serious problem of priorities during a time when state security was in the balance,” Colette Aviattal, a Labor MP, said, calling for Gen Halutz to step down.
“The country was under fire and all that was important to him was his stock portfolio,” he said.
Zevulon Orlev, from the right-wing National Religious Party, echoed the sentiment.
“During critical hours for a nation, one expects the chief of staff to be totally involved in the running of the war and not in personal questions of winnings or losses on the stock market,” he said.—AFP
https://www.dawn.com/news/206037/israeli-general-admits-he-sold-stocks-before-war

Posted by: daffyDuct | Dec 10 2023 16:57 utc | 116

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