Short Selling in Finnish Stock market
Tilli, Patrik (2022)
2022
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2022052712456
https://urn.fi/URN:NBN:fi:amk-2022052712456
Tiivistelmä
Short selling is a notorious investment method which has been used since the Dutch East India Company in 1609. It’s a method where the investor borrows specific shares and sells them back to the market, only to buy them back when the value has been decreased, gain-ing a profit when the stock’s value sinks.
Short selling raises ethical and moral questions and has been a target for regulations since 1938. Laypeople often see it as immoral and almost pure evil. It’s often connected to mar-ket volatility and other negative contributions. However, short selling actually keeps the markets efficient and increases liquidity.
The goal of this thesis was to gain a better understanding of short selling and how it affects the Finnish stock market.
Qualitative research methods were used in the making of this thesis. The author used In-ternet and library, to gain information from literature, studies and articles.
On the empirical results, the author used historical data from the Financial Supervision Au-thority. They publish short positions that have reached or exceed the threshold of 0,5% of the company’s issued share capital, as well as the position at the time when the position previously exceeded 0,5% has fallen below that threshold.
After the data was filtered, the author analysed the findings and came into the conclusion that short selling has been increasing during 2012 – 2022 in the Finnish stock market. The author found out, that as the OMXH25 markets prices increased, a similar pattern was shown in Net short positions on Finnish stock market. There are also clear increases on Net short positions when COVID-19 pandemic started.
Short selling raises ethical and moral questions and has been a target for regulations since 1938. Laypeople often see it as immoral and almost pure evil. It’s often connected to mar-ket volatility and other negative contributions. However, short selling actually keeps the markets efficient and increases liquidity.
The goal of this thesis was to gain a better understanding of short selling and how it affects the Finnish stock market.
Qualitative research methods were used in the making of this thesis. The author used In-ternet and library, to gain information from literature, studies and articles.
On the empirical results, the author used historical data from the Financial Supervision Au-thority. They publish short positions that have reached or exceed the threshold of 0,5% of the company’s issued share capital, as well as the position at the time when the position previously exceeded 0,5% has fallen below that threshold.
After the data was filtered, the author analysed the findings and came into the conclusion that short selling has been increasing during 2012 – 2022 in the Finnish stock market. The author found out, that as the OMXH25 markets prices increased, a similar pattern was shown in Net short positions on Finnish stock market. There are also clear increases on Net short positions when COVID-19 pandemic started.