Who made millions trading the October 7th attacks?

Before its attack on October 7th, Hamas maintained tight operational security. The assault blindsided Israel’s spies, and seems to have surprised even Hamas’s political leaders. But did someone know enough to profit? A new paper by Robert Jackson Jr, a former commissioner of America’s Securities and Exchange Commission, and Joshua Mitts of Columbia University suggests so.

The authors’ most striking finding is a surge in short sales—bets that a security’s price will fall—of an exchange-traded fund (etf) listed on the New York Stock Exchange under the ticker eis, which tracks an index of Israeli shares. In September an average of 1,581 shares a day of EIS were sold short, representing 17% of the daily total trading volume. On October 2nd, five days before the attacks, a whopping 227,820 shares were shorted, representing 99% of total volume. Rather than reflecting a souring of market sentiment, the increase in activity seems to have come from just two trades. Then, on the first trading day after the attack, standard “long” transactions outnumbered short sales by a similar number of shares (248,009). If these trades were made by the same investor, they would correspond to a $1m profit.