Litigation Shock Short
In plain terms
When a federal lawsuit naming a public company is filed in the categories that historically hurt the most (securities fraud, patent, antitrust), we go short for 1-6 months.
How it works
Federal court filings in nature_of_suit 850 (Securities), 830 (Patent), or 410 (Antitrust) naming a public company as a party predict -2% to -6% drift over 1-3 months. CourtListener RECAP free webhooks fire within minutes of new federal filings.
Data dependencies
- Daily prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.
- Pacer dockets
A data feed this strategy reads, refreshed on its normal schedule.
Expected edge
- Reported return
- 2-6%/yr
- Tested over
- 2010-present (RECAP coverage)
2-6%/yr post-filing drift (Bhattacharya-Galpin-Ray-Yu 2018).
Related families
When a company receives an SEC comment letter, it tends to underperform for ~12 months.
Patent-lawsuit signal -- currently inactive. We can see which companies are in patent suits but the free CourtListener feed does not tell us who won or the exact verdict date, so we cannot trade the win/lose direction the research describes. The family is paused (no signals) until that data is added.
Explore Litigation Shock Short on alphactor.ai
See which tickers this family is currently firing on, with live signals and rankings.