We provide a model of nonredundant credit default swaps (CDSs), building on the
observation that CDSs have lower trading costs than bonds. CDS introduction involves a …

Using a difference‐in‐difference approach, we find that restrictions placed on the CSI 300
and CSI 500 index futures trading during the recent Chinese stock market crisis deteriorated …

We model financial innovations such as Exchange-Traded Funds, smart beta products, and
many index-based vehicles as composite securities (CSs) that facilitate trading the common …

Institutional ownership is thought to facilitate short-selling, as short sellers typically borrow
from the holdings of institutions. Yet, institutional demand, and hence lending supply, is …

Cryptocurrencies provide a unique opportunity to identify how derivatives impact spot
markets. They are fully fungible and trade across multiple spot exchanges at different prices …

We develop a dynamic model of costly stock short-selling and lending market and obtain
implications that simultaneously support many empirical regularities related to short-selling …

Collateral frictions have a profound effect on our economic landscape, ranging from the
design of financial securities, laws, and institutions, to various rules and regulations. We …

I build a search model of bond and credit default swap (CDS) markets with endogenous
investor participation and show that shorting bonds through CDS increases the liquidity and …

We document the presence of market power in the equity securities lending market and
evaluate its impact on different investor groups and valuations. Our analysis reveals high …

We study a dynamic equilibrium model with costly-to-short stocks and heteroge-neous
beliefs. The closed-form solution to the model shows that costly short sales drive a wedge …