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Sep 28 for 1 day
London
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Short-sellers are often regarded as sophisticated market participants, but they are also vulnerable to a series of unusual risks. In this course, we will explore how short-sellers behave in practice, how they manage the risks they face and how they gain valuable new ideas and warning signs from stock lending data.
We will examine the evidence behind a variety of short-selling strategies and what can go wrong and why. Course participants should expect to learn about short-selling from a variety of perspectives: from the theoretical foundations through to the empirical evidence and on to recent case studies in short-selling. Participants should also emerge with a strong understanding of how to mitigate the risks they face as short-sellers and how to identify new short-sale candidates.
SHORT-SELLING OVERVIEW
The motivation for short-selling
Mechanics of the process
Barriers to short-selling
The use of derivatives as alternatives to short-sales
How regulators deal with short-selling
HOW DO SHORT-SELLERS BEHAVE?
Evidence on the behavior of short-sellers: the characteristics of securities they target and when they trade.
PORTFOLIO STRATEGIES
Short-extension funds
Absolute return funds
Flexible and defensive funds
Directional short-selling
Client issues
Fund structures
RISKS FOR SHORT-SELLERS
Short-sellers face a series of unusual risks not faced by long-investors:
Evaluate recall risk
Crowded exits
Manipulative short-squeezes and changes to collateral requirement
Synchronization risk
Agency problems
MANAGING THE RISKS
How short-sellers can mitigate these risks.
THE IMPORTANCE OF DATA ON SHORT-SALES AND STOCK LOANS
Stock lending and short-selling data has informational value, helping to predict stock returns and identify risks.
IDENTIFYING CANDIDATES FOR SHORT-SELLING
Where do short-sellers get their information? Quantitative and qualitative approaches for generating trading ideas. Predatory trading approaches.
THE FUTURE OF SHORT-SELLING
New types of short-seller and how their behavior can change the market dynamics. The response from long-investors and regulators.
 See below for more
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