Short Selling

<body stylesrc="../_private/template_title.htm" topmargin="10" leftmargin="10" bgcolor="#FFFFFF" link="#333366" vlink="#000000" alink="#000000"> <div align="left"> <table border="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" cellpadding="0" id="table2"> <tr> <td width="780"> <div align="center"> <table border="0" cellpadding="5" cellspacing="0" height="206" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="table3"> <tr> <td align="right" height="198" width="1%"> <p align="left"> <img border="0" src="../images/book_fabozzi_frank_(2004)_short_selling.gif" width="126" height="200"></td> <td valign="top" align="left" height="198"> <table border="0" cellspacing="1" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0" id="table4"> <tr> <td colspan="3" width="0%"> <p class="book_title">Short Selling<br> <font size="3">Strategies, Risks and Rewards</font></td> </tr> <tr> <td width="1%" class="book_details_tags" valign="top" height="16" align="left"> <img border="0" src="../images/blank_2x2.gif" width="2" height="2"><img border="0" src="../images/blank_2x2.gif" width="2" height="2"></td> <td width="52%" class="book_details_tags" valign="top" height="144" align="left" rowspan="9"> <map name="FPMap2"> <area href="../main/ratings.htm" shape="rect" coords="72, 0, 164, 33"> </map> <img border="0" src="../images_title/fabozz10.gif" usemap="#FPMap2" width="215" height="158"></td> <td class="book_details" valign="top" height="16" align="left" width="50%"> </td> </tr> <tr> <td width="1%" class="book_details_tags" valign="top" height="16" align="left"> </td> <td class="book_details" valign="top" height="16" align="left" width="50%"> </td> </tr> <tr> <td width="1%" class="book_details_tags" valign="top" height="16" align="left"> </td> <td class="book_details" valign="top" height="16" align="left" width="50%"> </td> </tr> <tr> <td width="1%" class="book_details_tags" valign="top" height="16" align="left"> </td> <td class="book_details" valign="top" height="16" align="left" width="50%"> </td> </tr> <tr> <td width="1%" class="book_details_tags" valign="top" height="16" align="left"> </td> <td class="book_details" valign="top" height="16" align="left" width="50%"> </td> </tr> <tr> <td width="1%" class="book_details_tags" valign="top" height="16" align="left"> </td> <td class="book_details" valign="top" height="16" align="left" width="50%"> </td> </tr> <tr> <td width="1%" class="book_details_tags" valign="top" height="16" align="left"> </td> <td class="book_details" valign="top" height="16" align="left" width="50%"> </td> </tr> <tr> <td width="1%" class="book_details_tags" valign="top" height="16" align="left"> </td> <td class="book_details" height="32" align="center" width="50%" rowspan="2"> </td> </tr> <tr> <td width="1%" class="book_details_tags" valign="top" height="16" align="left"> </td> </tr> </table> </td> </tr> </table> </div> <div align="center"> <center> <table border="0" cellpadding="10" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="468" id="table5"> <tr> <td> <script type="text/javascript"></script> <script type="text/javascript" src="http://pagead2.googlesyndication.com/pagead/show_ads.js"> </script> </td></tr> </table> </center> </div> <table border="0" cellpadding="5" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="table6"> <tr> <td width="50%" valign="top"> <p align="left" class="body_expanded"><strong style="font-weight: 400">Selling shares short will never be a respectable occupation, but it is a reality of the markets. Indeed, market neutral strategies, which combine long and short positions, are becoming increasingly popular with institutional investors. While there are various books on short selling that don't quite pass the "snicker test", this edited collection is a notable, and most welcome exception. </strong></p> <table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="125" align="left" id="table7"> <tr> <td width="120"> <script type="text/javascript"></script> <script type="text/javascript" src="http://pagead2.googlesyndication.com/pagead/show_ads.js"> </script> </td><td width="5"> </td> </tr> </table> <p align="left" class="body_expanded"><strong style="font-weight: 400">Contributing authors come from both academia and the Street. Opening chapters focus on the practicalities of shorting: borrowing shares, effecting short exposures with futures or options, and shorting indexes with exchange-traded funds. Next, the book turns to academic studies of short selling. These include extensions of the CAPM as well as empirical studies of short-selling activities. Three chapters present practitioners' accounts of how to sell short in practice. Another chapter looks at short selling globally. The book closes with a discussion of some apparent market abnormalities and how these relate to short selling.</strong></p> </td> <td width="50%" valign="top" class="body" rowspan="2"> <table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="table8"> <tr> <td width="100%" bgcolor="#333366"> <p class="header_yellow" align="center">Contents</td> </tr> <tr> <td width="100%" class="explanatory_text"> <table border="1" cellpadding="0" cellspacing="5" style="border-collapse: collapse" bordercolor="#CCCCFF" bgcolor="#CCCCFF" width="100%" id="table9"> <tr> <td class="contents_expanded"> <p class="contents_compressed" style="margin-top: 3; margin-bottom: 3">1. Introduction</p> <p class="contents_compressed" style="margin-top: 3; margin-bottom: 3">2. Mechanics of the equity lending market</p> <p class="contents_compressed" style="margin-top: 3; margin-bottom: 3">3. Shorting using futures and options</p> <p class="contents_compressed" style="margin-top: 3; margin-bottom: 3">4. Is selling ETFs short a financial "extreme sport"?</p> <p class="contents_compressed" style="margin-top: 3; margin-bottom: 3">5. Restrictions on short selling and exploitable opportunities for investors</p> <p class="contents_compressed" style="margin-top: 3; margin-bottom: 3">6. Implications of short selling and divergence of opinion for investment strategy</p> <p class="contents_compressed" style="margin-top: 3; margin-bottom: 3">7. Short sale constraints and overpricing</p> <p class="contents_compressed" style="margin-top: 3; margin-bottom: 3">8. How short selling expands the investment opportunity set and improves upon potential portfolio efficiency</p> <p class="contents_compressed" style="margin-top: 3; margin-bottom: 3">9. The information content of short sales</p> <p class="contents_compressed" style="margin-top: 3; margin-bottom: 3">10. Spotting clues in Qs</p> <p class="contents_compressed" style="margin-top: 3; margin-bottom: 3">11. The economic profit approach to short selling</p> <p class="contents_compressed" style="margin-top: 3; margin-bottom: 3">12. Long-short equity portfolios</p> <p class="contents_compressed" style="margin-top: 3; margin-bottom: 3">13. Short sales in global perspective</p> <p class="contents_compressed" style="margin-top: 3; margin-bottom: 3">14. Short selling and financial puzzles</td> </tr> </table> </td> </tr> </table> <p align="left" class="body">For an in-depth introduction to many practical and theoretical aspects of short-selling, the book is excellent. Be aware that it is not comprehensive. It has a modest bias towards promoting some form of short selling for sophisticated investors. A few dissenting voices among the contributing authors would offer some balance. There are topics the book doesn't explore. One is short squeezes, which are mentioned only in passing. A full chapter discussing how short-squeezes transpire would have made for interesting reading. War stories of the ups and downs of actual short-only funds would also have been nice.</p> <p align="left" class="body">The book is mostly non-quantitative. You should be familiar with portfolio theory and the capital asset pricing model (CAPM) to follow related discussions. Despite its shortcomings, it has a tremendous amount to offer. For anyone who needs to understand short-selling, it is a good place to start.</p> <p align="center" class="body"> </p> </td> </tr> <tr> <td width="50%" valign="bottom"> <table border="0" cellpadding="5" cellspacing="0" style="border-collapse: collapse" width="100%" bgcolor="#CCCCFF" height="24" id="table10"> <tr> <td width="100%" align="left"> <script type="text/javascript"></script> <script type="text/javascript" src="http://pagead2.googlesyndication.com/pagead/show_ads.js"> </script> </td></tr> </table> </td> </tr> </table> <div align="left"> <table border="0" cellpadding="10" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="table11"> <tr> <td width="50%" bgcolor="#FFFFCC" align="center" valign="top"> <table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" bgcolor="#FFFFCC" id="table12"> <tr> <td> <p class="body" style="margin-bottom: 6"><b><font color="#333366" size="3">For related books, see sections:</font></b></p> <p class="bullet_line_space"><img border="0" src="../images/bullet.gif" width="20" height="10"><a target="_top" href="../link_topic/portfolio_management_specialty_strategies.htm">Portfolio Management - Specialty Strategies</a></p> <p class="bullet" style="margin-top: 5; margin-bottom: 5"> <img border="0" src="../images/bullet.gif" width="20" height="10"><a target="_top" href="../link_topic/portfolio_management_hedge_funds.htm">Portfolio Management - Hedge Funds</a></p> <p class="bullet" style="margin-top: 5; margin-bottom: 5"> <img border="0" src="../images/bullet.gif" width="20" height="10"><a target="_top" href="../link_topic/portfolio_management_equity.htm">Portfolio Management - Equities</a></p> <p class="bullet" style="margin-top: 5; margin-bottom: 5"> <img border="0" src="../images/bullet.gif" width="20" height="10"><a target="_top" href="../link_topic/markets_industries_equities.htm">Markets - Equities</a></p> </td> </tr> </table> </td> </tr> </table> </div> </td> <td>  </td> </tr> </table> </div>  <table border="0" style="border-collapse: collapse" width="100%" cellpadding="0" id="table1" bgcolor="#FFFFFF"> <tr> <td colspan="2" height="12"> <p style="margin-top: 0"> </td> </tr> <tr> <td align="right"> <p align="left" style="margin-bottom: 2px"> <a target="_top" href="http://www.riskexpertise.com/link/advertising.htm"> <font size="1" color="#000000" face="Arial">Ads by Contingency Analysis.</font></a></td> <td align="left"> <p align="right" style="margin-bottom: 2px"> <a target="_top" href="http://www.riskexpertise.com/link/advertising.htm"> <font size="1" color="#000000" face="Arial">Advertise on this site.</font></a></td> </tr> <tr> <td align="center" colspan="2">  <iframe src="http://servedbyadbutler.com/adserve/;ID=147917;size=300x250;setID=93136;type=iframe" allowtransparency="true" background-color="transparent" style="margin: 0px; padding: 0px; border-width: 0px" width="300" height="250" frameborder="0" marginwidth="0" marginheight="0" scrolling="no"> <![if lt IE 4]> <script src="http://servedbyadbutler.com/adserve/;ID=147917;size=300x250;setID=93136;type=js" type="text/javascript"> </script> <noscript> <a href="http://servedbyadbutler.com/go2/;ID=147917;size=300x250;setID=93136"> <img src="http://servedbyadbutler.com/adserve/;ID=147917;size=300x250;setID=93136;type=img" border="0" height="250" width="300" alt=""></a> </noscript><![endif]> </iframe>   </td> </tr> </table> <p align="center" style="margin-top: 20"> <map name="FPMap0_I1"> <area href="http://www.riskbook.com" shape="rect" coords="0, 0, 184, 29" target="_top"></map> <img border="0" src="../images/open_book_riskbook.gif" usemap="#FPMap0_I1" width="185" height="30"></p> <p class="a" align="center"><font face="Arial" size="2"><a href="../main/disclaimer.htm">disclaimer</a></font></p> <p class="a" align="center"><span class="verdana10">website:</span> <a target="_top" href="http://www.contingencyanalysis.com"> <font size="2" face="Arial">http://www.contingencyanalysis.com</font></a><br> <span class="verdana10">books direct link:</span> <a target="_top" href="http://www.riskbook.com"><font size="2" face="Arial">http://www.riskbook.com</font></a><br> copyright <font face="Times New Roman">©</font> Contingency Analysis, 1996 - current</p> <p class="a" align="center"><map name="FPMap1_I1"> <area target="_top" href="http://www.contingencyanalysis.com" shape="rect" coords="0, 0, 240, 88"> </map><img border="0" src="../images/logo_book_white.gif" usemap="#FPMap1_I1" width="241" height="89"></p>  </body>