At least one recent academic study examining trading activity around Hurricanes Katrina and Rita, which devastated the Gulf Coast in 2005, suggests plenty of active, seemingly in-the-know investors made market bets around those events too. While the researchers weren’t able to measure precisely how profitable these trades turned out to be, their timing hints that investors were reacting to, rather than anticipating, price moves. “They were less sophisticated than we expected,” says co-author Benjamin Blau, an economist at Utah State University. The study, published in 2008, looked at attempts to sell short, or bet ... (full story)