When the Borussia Dortmund bus was hit with three bombs on April 11th just before the Champions League quarter-final match against Monaco, everyone’s first thoughts were towards another terrorist attack. But when police found out a possible reason for such an attack was a financial bet, that was a real chill to the bone: terrorists financing their attacks with similiar operations was something no one ever imagined.
A Terrorist Gamble: Financial Dynamics
After the 28-year-old suspect identified as Sergej W. was arrested German police revealed that the attack was linked to a financial bet. In fact, investigators said that the attacker had bought 15,000 put options in Frankfurt-listed Borussia Dortmund BVB on April 11th, the same day of the attack. In doing so, the Russian-German suspect hoped to make quite a relevant profit thanks to the bus attack.
Put options indeed are a financial instrument that gives the trader the right, but not the obligation, to sell a specified amount of an underlying security – in this case, Borussia Dortmund shares – at a specified price by a predetermined date – in this case, June 17th. In this way the attack was intended to make Borussia share price drop, giving the attacker the possibility to buy shares of the German soccer team at a very low price and resell them at the higher price set by the financial instrument he had signed, allowing him to make a lot of money. The plan did not work.
Markets seemed not to care too much about the attack. Shares of Borussia Dortmund fell only 2% on the day of the blast, then rose by 1.75% on April 12th and dropped by 3.8% on April 13th, suggesting a very slight correlation with the attack.
Things would have been different “if a player had been seriously injured or even killed as a result of the attack”, federal prosecutors said: in that case, the significant expected share price drop would have meant a profit of more than 1 million euros for the attacker, according to The Wall Street Journal.
New Ways of Financing
But even if German prosecutors said that the attack on the bus was not an Islamic act of terrorism, we should be worried about this in the future. These kind of actions could be used by future terrorists if they have just a little knowledge of financial markets and it could become a way for them to gain a lot of money. The obvious affect of it being an increase in the number of terrorist actions – an elegant and well-behaved new way of financing for terrorists. A sophisticated form of war against the Occidental culture using their inventions symbolising the high level of development of such an advanced society.
How to React?
So what can we do to safeguard from these possible new kinds of attack? Of course, the most natural way to fight these actions is a reinforcement of the controls and the intensification of the monitoring of the financial movements on the market. For instance, every suspicious movement should be carefully taken into account, precise, responsive actions should be developed and a list of potentially high-risk products created whose movements should be observed with more care.
Techniques and tools from financial risk management, and data analytics will be of great value for developing appropriate responses. In this way we could even use financial markets as a tool to intercept possible terrorist attacks, turning them into a real terror alarm. After all technology, the same one terrorists want to use for reaching their objectives, is a double-edged sword.