We analyze the effects of spot market short-sale constraints on derivatives trading using a unique Chinese stock market futures trading database. Due to short-sale constraints, investors' pessimistic views on the underlying index can be expressed solely through short futures positions, while...

We argue that under the U.S. tax system, where individual investors are taxed separately from the corporations they own, cash-for-stock acquisition (CSA) is inter alia a profitable arbitrage. This argument is based on the idea that the burden of personal taxation creates a wedge between the...