[ninja3925]

For anybody close to the topic and knowing how shocked the Israeli society was on Oct 7th, this paper makes a very strong claim that needs more than just circumstantial evidence (higher short trades). Like any circumstantial evidence, many reasons could trigger unusual trading patterns

[DarknessFalls]

As the article goes to great lengths to point out, the trades in EIS weren't random. They represented the second highest spike in short trades in the ETF behind April of this year, when it was predicted that Hamas would attack on the eve of Passover. It's difficult to argue that this surge was merely coincidence or statistical noise.

As for the Israeli public at large being informed about these attacks and knowing precisely when they would occur, it would seem they were as astonished as anyone. Whomever made these short trades on Oct 2nd were likely only a handful of informed parties. That's the component of this I'd love to know. Could the SEC determine where these trades originated and were they within a Pro-Hamas country like Lebanon, Iran or... Saudi Arabia? Or did it originate within the intelligence community, acting in bad faith?

[rossdavidh]

It does look interesting, but the fact that it was not even the highest spike in the previous 52 weeks, much less of any longer time period, makes it a lot less impressive than it sounds at first.

Now, I know of no reason why Hamas, Iran, or Russian sources that knew something was about to go off, would not have tried to profit from that (through proxies of one sort or another). But this doesn't quite seem unusual enough to act on. If this kind of spike triggered an alarm, it would have gone off a couple times in the previous 52 weeks alone, and any alarm that has that many false positives will get ignored eventually.

[DarknessFalls]

I'm not a professional trader by any means, but I would regard all of these spikes as important seismic activity. On the few occasions I've done options trading, I've looked at level 2 data for peaks just like this. It's just another data point meaning there might be significant movement, but nothing is certain. In this case, I would pull up the calendar of Jewish holidays. Is it nearly Passover - that holiday where the angel of Death went door-to-door? Well, that's a big indicator to me that there could be a terrorist event. The April spike definitely makes sense in that context, along with Egypt's warnings. Oct. 6th-8th is another holiday, not as big. Holidays mean people will be out celebrating in large groups.

All of it combined lends itself to algorithmic early detection systems. The general public should have this security. Not a sure thing, but neither is meteorology.

[lupusreal]

Society generally being shocked is not inconsistent with a few people secretly not being shocked.

[HillRat]

It's interesting but not yet compelling -- there just isn't enough data to support such an explosive claim, but there's enough to at least warrant further investigation. (My skepticism is somewhat heightened by the fact that the paper keeps insisting that their prices are in NIS when they're actually in agorot, basically a cents-not-dollars error on their part. Still talking about millions of dollars in potentially ill-gotten profits, but not nearly the magnitude they allege.)