The Influence of Media Coverage on Short Selling Decisions : Evidence from the Netherlands

This research paper investigates whether the sentiment conveyed in the media, i.e. media optimism and media pessimism, is predictive of the amount of net short positions. The relationship is investigated on a daily basis using the Dutch stock market as an example. It was expected that short selling decisions are sentiment based and that a relationship between the sentiment conveyed in the media and the amount of net short positions is found. The results of this research paper suggest that media pessimism has the most influence on the amount of net short positions, but at the same time also call for further research on the topic.