Research results show that the return on short-selling investments focused on institutions and foreigners far outpaced credit investments in which individuals owed debt.
Hanyang University Research Team 3-year analysis paper
Controversy over’tilted playground’ intensifies
It is noteworthy because it supports the claim that short selling is a’sloping playground’ between institutions, foreigners and individuals.
The’Financial Management Research’ published by the Korean Financial Management Association on the 17th published the thesis (Investment Performance of Short Selling and Credit Transactions) by Dr.
It contains the results of daily short selling and credit transactions (financing) analysis for 36 months from June 2016. In terms of volume and price alone, credit transactions were larger than short selling. In terms of the amount of transactions during the investigation, credit transactions (547 trillion 92.7 billion won) are twice that of short selling (309 trillion 813.2 billion won). On the other hand, during the same period, the proceeds from short selling amounted to 1,7662 trillion won, but the credit transaction with debt investment lost 7265 billion won. The researchers analyzed that “relatively, short selling traders are more advantageous than individual investors in various aspects such as cost advantage, choice of stocks, and information power.” It was also confirmed that the higher the proportion of short selling transactions, the higher the profitability of short selling investments. This means that there were many opportunities to realize profits as the actual stock price of stocks that were driven by short selling fell. On the other hand, the more credit-intensive stocks, the lower their profitability. In addition, it was found that it was difficult to make a return on credit investment due to the power of short selling.
The research team said, “In the downturn period, even if there is a short selling force, even if there is a short selling force (borrowing money to invest), the credit transaction generated profits.” .
Reporter Ahn Hyo-seong [email protected]