Sat, Oct 10, 2015
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

EDHEC-Risk Institute lists weight of evidence on effects of short selling and high frequency trading

Wednesday, February 27, 2013

Beverly Chandler, Opalesque London: Frédéric Ducoulombier, Director of Executive Education, EDHEC-Risk Institute and Director, EDHEC Risk Institute–Asia comments on the proposed restrictions on trading which have been thrown up by the global financial crisis in this month’s Edhec-Risk newsletter. Ducoulombier reflects on the academic studies which have concluded that short sellers contribute positively to market efficiency. "Research that has been undertaken by Securities and markets regulators around the world introduced bans on short-selling at different stages of development of the recent crisis, purportedly to halt price falls, reduce volatility and, in the words of former chairman of the Securities and Exchange Commission Christopher Cox, 'restore equilibrium to the markets’" Ducoulombier writes.

"These hasty decisions were not only devoid of theoretical basis, but also flew in the face of empirical evidence. Academic studies, including work by EDHEC-Risk Institute researchers, had documented the positive contribution of short-sellers to market efficiency and shown that constraining short sales significantly reduced market quality – by reducing liquidity and increasing volatility – and could have unintended spillover effects."

In a series of articles published or forthcoming in leading academic journals, EDHEC Business School Professor Ekkehart Boehmer, w......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. U.S. hedge funds prepare for worst finish this year since 2008[more]

    Komfie Manalo, Opalesque Asia: U.S.-focused hedge funds are preparing for their worst year since the 2008 global financial crisis, following a series of letdown including the market sell-off in August and the sell-off in healthcare and biotechnology sectors last month, reported

  2. Investing - AQR Capital and Renaissance Technologies raise stakes in Southwest Airlines[more]

    From In the previous part of this series, we saw how institutional investors played Southwest Airlines (LUV) in 2Q15. Now let’s move on to the trades executed by key hedge funds in Southwest Airlines over the same period. … Most of the hedge funds that had significant exposu

  3. Manager Profile - Pimco alternative funds flourish as 30-year bond rally fades[more]

    From Inside Pacific Investment Management Co., the bond behemoth that lost two chief investment officers last year and saw almost $500 billion of client money leave, a hidden profit engine is easing some of the pain. For more than a decade, Newport Beach, California-based Pimco has qu

  4. Niche Investing - Art investment funds: Attracting institutional and other new investors[more]

    From The Deloitte/ArtTactic Art and Finance Report 2014 (the "Art and Finance Report") noted that the "global art investment fund market was estimated to be worth at least $1.26 billion in the first half of 2014." This seems almost inconsequential when juxtaposed with the $54 billion of

  5. DoubleLine’s Jeffrey Gundlach warns of another round of market shakedown[more]

    Komfie Manalo, Opalesque Asia: DoubleLine Capital co-founder Jeffrey Gundlach is painting a bleak future as he warned that the U.S. equity market and other risk markets, such as high-yield "junk" bonds, are facing another round of selling pressure. Gundlach said in an interview with