Impact of insider trading on a stock price : help me understand

  • Thread starter Thread starter understanding_trading
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guru said:
Are you asking how someone having inside information can profit the most?
This may depend on the stock and circumstances, especially expected price range after the event.
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Reading all this right away.
Thank you very much.

Yeah the question is Who can profit the most, and can it Hurt the company significantly ?
 
understanding_trading said:
Reading all this right away.
Thank you very much.

Yeah the question is Who can profit the most, and can it Hurt the company significantly ?
More...


I'm not sure if it can hurt the company, but probably not because the price will probably move the same way, just insiders will profit more than other people, so it mainly hurts other investors.
 
Up to the judge - as I recall the current limits are up to-3X disgorgement, 20 years, and $5 million fine, but check sec.gov as they may have changed.
 
guru said:
I'm not sure if it can hurt the company, but probably not because the price will probably move the same way, just insiders will profit more than other people, so it mainly hurts other investors.
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I see.
And since it's not like the company Will be destroyed or impacted physically or on the long run, as stated in my examples. And for a big, worldwide company only a very big event would make the price of the stock plumet.
the whole scene Will Benefit People on the mid/long run if they invest when the price is low,
Since the price Will adjust or go up once everyone understand the disaster was momentary...

In the end, i guess it would be more difficult for the company if no insider information is leaked. This is absurd
 
understanding_trading said:
how can this insider knowledge be used to take advantage of the situation four month BEFORE the big event?
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If the company is private, the person can sell his shares back to the company usually. Alternatively, if it's a big company, he can make second-order trades, possibly going short on the business partners of the company.


If the company is public, it's pretty easy to do an insider trade. The insider can either tip someone else (and presumably they will both be caught), or make the trade themselves. Intel's CEO closed out of all but $250K of his share when the Spectre CPU vulnerability came about. He sold a month before the news was widely known. Just need to keep enough around for a lawyer, and he got to keep the rest.
 
understanding_trading said:
I see.
And since it's not like the company Will be destroyed or impacted physically or on the long run, as stated in my examples. And for a big, worldwide company only a very big event would make the price of the stock plumet.
the whole scene Will Benefit People on the mid/long run if they invest when the price is low,
Since the price Will adjust or go up once everyone understand the disaster was momentary...

In the end, i guess it would be more difficult for the company if no insider information is leaked. This is absurd
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Translated...

"I've seen what people can do to the big bad wolf of wall street with Reddit. I hate the company I work for. How can I do the same thing the Reddit guys did, to my OWN company, the one that pays me a pittance of a salary? How do I get rich doing it?"
 
Overnight said:
Translated...

"I've seen what people can do to the big bad wolf of wall street with Reddit. I hate the company I work for. How can I do the same thing the Reddit guys did, to my OWN company, the one that pays me a pittance of a salary? How do I get rich doing it?"
More...
You have nooo idea
 
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