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What's meant by insider trading?

Trading Systems and Market Timing Models

What's meant by insider trading?

Postby colvyr » Sat Jan 26, 2013 9:57 am

Wake of issue in the case of Rajat Gupta, ex-director of Goldman Sachs, Reliance industries fined by Sebi etc.
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What's meant by insider trading?

Postby jacinto » Sat Jan 26, 2013 10:04 am

Insider trading is getting knowledge of securities previous to when it is being public that could be used for Illegal Trading in Stock Market.
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What's meant by insider trading?

Postby mikko56 » Sat Jan 26, 2013 10:19 am

The buying or selling of a security by someone who has access to material, nonpublic information about the security.

Insider trading can be illegal or legal depending on when the insider makes the trade: it is illegal when the material information is still nonpublic--trading while having special knowledge is unfair to other investors who don't have access to such knowledge. Illegal insider trading therefore includes tipping others when you have any sort of nonpublic information. Directors are not the only ones who have the potential to be convicted of insider trading. People such as brokers and even family members can be guilty.

Insider trading is legal once the material information has been made public, at which time the insider has no direct advantage over other investors. The SEC, however, still requires all insiders to report all their transactions. So, as insiders have an insight into the workings of their company, it may be wise for an investor to look at these reports to see how insiders are legally trading their stock.
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What's meant by insider trading?

Postby jud7 » Sat Jan 26, 2013 10:24 am

Insider trading is the trading of a corporation's stock or other securities (such as bonds or stock options) by individuals with access to non-public information about the company. In most countries, trading by corporate insiders such as officers, key employees, directors, and large shareholders may be legal, if this trading is done in a way that does not take advantage of non-public information.

However, the term is frequently used to refer to a practice in which an insider or a related party trades based on material non-public information obtained during the performance of the insider's duties at the corporation, or otherwise in breach of a fiduciary or other relationship of trust and confidence or where the non-public information was misappropriated from the company.
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What's meant by insider trading?

Postby benedicto » Sat Jan 26, 2013 10:35 am

dealing in a prescribed instrument on a prescribed market whilst in the possession of information that would have an effect on the price (price sensitive information) , if known, not generally available to the public.
Passing that information on to someone else knowing they might deal on it.
This applies to everyone, not just market participants.
There are lots of other offences that the average person would know were not right (like pump & dump) and in the UK come under the general category of Market Abuse.
Things like passing misleading information (say on a bulletin board), manipulating a share price (maybe by using two platforms like market order book and Spread Betting).
Basically anything that looks unfair!
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