Any evidence to shorting airline stock on 9/11?

I've heard this theory multiple times: that prior to 9/11 there was a lot of "shorting" of airline stock. In case you don't know, "shorting" means you borrow the stock and sell it with the promise you'll bring it back to the original owner. You are betting the stock will drop.

Of all the conspiracy theories I've heard about 9/11, this one seems the easiest to verify or debunk, since every day zillions of bits of data are printed regarding the stock market's every twitch.

So... does anyone know if anyone has looked into this? If so, please provide a link.

The theory goes that someone made a ton of money, but still hasn't picked it up yet.

Please let me know if you have a link to someone who has actually looked at the data.

I provide a link of someone's study below, but I just want to start with the caveat that I looked at this a little bit myself back at the time. The difficulty was that airlines and some related industries were rolling over before 9/11 happened, making it harder to disentangle potentially nefarious activity from normal trading.

Anyway, what I have for you is an investigation of put options being bought pre-9/11, with some promising evidence of some informed trades being made. (Call and put options make it easier to put on a large directional bet without tying up so much capital.)

http://www.business.uiuc.edu/poteshma/research/poteshman2006.pdf

The paper has links to other articles (with mostly circumstantial evidence).

Hope this helps!

This has been investigated at length by the SEC and it's been determined that, although there was some shorting of airline stocks just prior to 9/11, there is no indication that anything was done with pre-knowledge.

What you are missing is, the market was on it's way down into the toilet when the planes flew into the WTC... and WHAT do you DO when you are trading a sinking market?... why.. you go SHORT...

If that event had not happened, the market would have trashed itself in another 4 or 5 months anyway... The SEC issued a report on this and the conclusion was, the events of 9/11 merely hurried up something that was going to happen naturally.

I still have the data on the 250 stocks I was tracking on 9/10/01 and, no matter how I look at that data, I come to the same conclusion the SEC came too.

There is lots of evidence some investors were shorting airline stocks just before 9/11, it is all public record. It is also public record that there was no volume of short positions any larger than one might anticipate given all the technical indicators of those stocks on 9/10.

http://www.newsmax.com/archives/articles/2002/6/2/62018.shtml

If there was a lot shorting, it is possible it was just due to rising gas prices. It is certainly possible the terrorists shorted the stocks though.

It has been looked into exhaustively. It is an obvious follow-up.

Not just shorting Airline Stock. Jet fuel was impacted, the price of oil went up. The price of all commodities went up, the stock market took a major tumble that took until this year to fully recover. Investments in all of these areas were/are being looked into.

The SEC investigates these links on a regular basis

You mean someone would actually maintain a link disproving conspiracy only to have it buried in the tons of stupid conspiracy theories? Much as people hate Muslim's, it might do some good to recognize the actual conspiracy - a bunch of people with college educations made a plan to steal flying bombs and it worked even better than they planned.

There are a lot of interesting events mentioned at this website.

http://www.cooperativeresearch.org/timeline.jsp?timeline=complete_911_timeline&before_9/11=insiderTrading

They are too numerous to copy and paste but the shorting of stock on the insurance companies for the airlines and the world trade center itself is quite curious.

I'd file this theory right along woth all the rest of those nut case theories about 9/11 being a conspiracy that have involved half of the population of the planet in one way or another. In the trash.

If they did make a ton of money it could easily be traced. FTC requires records of every transaction make concerning stocks and bonds.

Put and call options are contracts that allow their holders to sell and buy assets, respectively, at specified prices by a certain date. Put options allow their holders to profit from declines in stock values because they allow stocks to be bought at market price and sold for the higher option price. The ratio of the volume of put option contracts to call option contracts is called the put/call ratio. The ratio is usually less than one, with a value of around 0.8 considered normal.

Financial transactions in the days before the attack suggest that certain individuals used foreknowledge of the attack to reap huge profits.
1 The evidence of insider trading includes:

Huge surges in purchases of put options on stocks of the two airlines used in the attack -- United Airlines and American Airlines
Surges in purchases of put options on stocks of reinsurance companies expected to pay out billions to cover losses from the attack -- Munich Re and the AXA Group

Surges in purchases of put options on stocks of financial services companies hurt by the attack -- Merrill Lynch & Co., and Morgan Stanley and Bank of America

Huge surge in purchases of call options of stock of a weapons manufacturer expected to gain from the attack -- Raytheon

Huge surges in purchases of 5-Year US Treasury Notes
In each case, the anomalous purchases translated into large profits as soon as the stock market opened a week after the attack: put options were used on stocks that would be hurt by the attack, and call options were used on stocks that would benefit.

Losers
American Airlines and United Airlines, and several insurance companies and banks posted huge loses in stock values when the markets opened on September 17.

Put options -- financial instruments which allow investors to profit from the decline in value of stocks -- were purchased on the stocks of these companies in great volume in the week before the attack.

United Airlines and American Airlines
Two of the corporations most damaged by the attack were American Airlines (AMR), the operator of Flight 11 and Flight 77, and United Airlines (UAL), the operator of Flight 175 and Flight 93. According to CBS News, in the week before the attack, the put/call ratio for American Airlines was four. 3 The put/call ratio for United Airlines was 25 times above normal on September 6. 4

Although uniformly ignored by the mainstream U.S. media, there is abundant and clear evidence that a number of transactions in financial markets indicated specific (criminal) foreknowledge of the September 11 attacks on the World Trade Center and the Pentagon. In the case of at least one of these trades -- which has left a $2.5 million prize unclaimed -- the firm used to place the "put options" on United Airlines stock was, until 1998, managed by the man who is now in the number three Executive Director position at the Central Intelligence Agency. Until 1997 A.B. "Buzzy" Krongard had been Chairman of the investment bank A.B. Brown. A.B. Brown was acquired by Banker's Trust in 1997. Krongard then became, as part of the merger, Vice Chairman of Banker's Trust-AB Brown, one of 20 major U.S. banks named by Senator Carl Levin this year as being connected to money laundering. Krongard's last position at Banker's Trust (BT) was to oversee "private client relations". In this capacity he had direct hands-on relations with some of the wealthiest people in the world in a kind of specialized banking operation that has been identified by the U.S. Senate and other investigators as being closely connected to the laundering of drug money.

Krongard (re?) joined the CIA in 1998 as counsel to CIA Director George Tenet. He was promoted to CIA Executive Director by President Bush in March of this year. BT was acquired by Deutsche Bank in 1999. The combined firm is the single largest bank in Europe. And, as we shall see, Deutsche Bank played several key roles in events connected to the September 11 attacks.

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