Israel investigating whether traders knew about Hamas attack in advance

Israel is investigating claims that investors may have known in advance that Hamas was planning to attack southern Israel on 7 October.

Research by law professors Robert Jackson Jr from New York University and Joshua Mitts of Columbia University found significant short-selling of shares leading up to the attacks.

"Days before the attack, traders appeared to anticipate the events to come," the researchers wrote, citing short interest in the MSCI Israel Exchange Traded Fund (ETF) that "suddenly, and significantly, spiked" on 2 October based on data from the Financial Industry Regulatory Authority (Finra).

"And just before the attack, short selling of Israeli securities on the Tel Aviv Stock Exchange (TASE) increased dramatically," they added in a 66-page report, as reported by Reuters. 

Short-selling involves profiting from securities you don’t own. It is the process where if you are confident that a company’s shares are going to fall, you borrow them from somebody, sell them and later buy them on the market at a lower price. Profit is made in the difference after giving it back to the lender. 

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