is this allowed

P

ProgrammerGuy

if you are an insider and knew google's earnings would you be able to buy stock before the news came out?

The only rules I'm aware of is that insders have to hold the stock for > 6 month.
 
How dense are you? You wouldn't buy the stock yourself. You would have seemingly unrelated friends and acquaintances buy it and split profits later.
 
Anyone that benefited from having information that isn't available to the public is against the law. You don't have to be an insider to be convicted of using insider information.
 
Quote from ProgrammerGuy:

if you are an insider and knew google's earnings would you be able to buy stock before the news came out?

The only rules I'm aware of is that insders have to hold the stock for > 6 month.
More...

Can you say "Leavenworth"? LOL.

No, you cannot trade on any information that is not available to the public....many have, most get caught, especially now in the days of computerized trading.


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

Investopedia Says:
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.


Don
 
Quote from Don Bright:

Can you say "Leavenworth"? LOL.

No, you cannot trade on any information that is not available to the public....many have, most get caught, especially now in the days of computerized trading.
More...
Based on the analytical possibilities available with today's computing power, you'd certainly think that many/most would get caught... However, hearing Najarian's (& other's) frequent reports on CNBC, this does not appear to be the case. A large number of surprise announcements are preceded by an unusual/unexplained increase in trading volume...

However, as the others have correctly noted, it is definitely illegal and you roll the dice if/when you do it ....

R
 
Well..."Dr. J" and us other old guys realize that price action always precedes news items. We "know" that others "know" stuff ahead of time....LOL.


Don
 
Quote from Don Bright:

Can you say "Leavenworth"? LOL.

No, you cannot trade on any information that is not available to the public....many have, most get caught, especially now in the days of computerized trading.

Don
More...

Most don't get caught. Only retail traders get caught, and then they occasionally will "set an example" and arrest someone low down in an investment bank, or prosecute some hedgefund no one cares about, to delude the public into thinking the agency exists to protect citizens from securities fraud. I can prove this: look at all the LBOs last summer with HUGE volume spikes before them, and exceedingly abnormal options activities, and all I can remember is the SEC saying "we're looking at TXU" and "we're prosecuting some chinese couple who profited off the DJ insider information so we can let all the other people who traded off that insider information off the hook and appear to be doing something useful."

I understand that for you, getting on the SEC's bad side is unnecessary and to appear to believe in their integrity can't hurt... but come on man, you know how much of a scam this business is.

I'm sure if your traders traded with insider information, they would get caught... most "non-connected" insider information trading may well get prosecuted, but most insider trading is done by the GSes of the world and nothing is done to stop them.
 
You must log in or register to reply here.
Back
Top