Wednesday, September 14, 2011

Speculative trading

I was asked whether short sales contributed to stock market volatility. My answer was "I don't know" since the research is mixed. There has been a recent paper on the New York Fed's website that links speculative trading to co-movements in global markets. Enjoy.


Anonymous said...

I just never understood where this fits into long term investing, to me it was more like Las Vegas, betting against a company

John in Ky said...

Thanks Professor Black. Admittedly, most of the language in the article makes my head hurt, but it basically agrees with the basic logic that I suspected.