Israeli stocks saw short-selling spike ahead of attacks

• Short-sellers benefit when share prices decline, as Israeli stocks did in the aftermath of the attacks.

Zoom in: The authors — one of whom is a former SEC commissioner — analyzed apparent spikes in short-selling of the principal Israeli-company exchange-traded fund in the days before the attack.

• The authors note that there was a similar build-up of short positions in early April, ahead of what was reportedly a Hamas plan to attack Israel on Passover, which started April 5.

What they're saying: "Our findings suggest that traders informed about the coming attacks profited from these tragic events," wrote law professors Robert Jackson Jr., of New York University, and Joshua Mitts, of Columbia University.

Reality check: While the paper presents a compelling case for a further investigation of what, if anything, went on, it's not a slam dunk.

• The authors themselves note: "We are unable to link particular market participants to the pre-attack developments we see in securities markets—to say nothing of the underlying sources of information that produced the trades we study."

What to watch: Israeli securities regulators say they're investigating the claims, Reuters reports.