Insider Trading

Insider Trading
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.

Investment dictionary. . 2012.

Look at other dictionaries:

  • Insider trading — is the trading of a corporation s stock or other securities (e.g. bonds or stock options) by individuals with potential access to non public information about the company. In most countries, trading by corporate insiders such as officers, key… …   Wikipedia

  • insider trading — n: the illegal use of esp. material inside information for profit in financial trading see also tippee Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. insider t …   Law dictionary

  • insider trading — Trading by officers, directors, major stockholders, or others who hold private inside information allowing them to benefit from buying or selling stock. Bloomberg Financial Dictionary insider dealing or insider trading This refers to the illegal… …   Financial and business terms

  • Insider trading — Trading by officers, directors, major stockholders, or others who hold private inside information allowing them to benefit from buying or selling stock. The New York Times Financial Glossary * * * insider trading insider trading ➔ trading * * *… …   Financial and business terms

  • insider trading — insider dealing UK / US or insider trading UK / US noun [uncountable] the crime of buying or selling shares in a company using information that is available only to people working within that company …   English dictionary

  • insider trading — n. the buying or selling of a company s stock by one who has access to information not made public: trading based on such information may be illegal …   English World dictionary

  • insider trading — noun Buying or selling securities of a publicly held company by a person who has privileged access to information concerning the companys financial condition or plans. Wall Street wants repeal of the provisions for penalizing executives (and… …   Wiktionary

  • insider trading — noun buying or selling corporate stock by a corporate officer or other insider on the basis of information that has not been made public and is supposed to remain confidential • Hypernyms: ↑trading * * * noun [noncount] finance : the illegal… …   Useful english dictionary

  • insider trading — also insider dealing N UNCOUNT Insider trading or insider dealing is the illegal buying or selling of a company s shares by someone who has secret or private information about the company …   English dictionary

  • insider trading —   Locuzione anglosassone che indica la pratica illecita di utilizzare informazioni riservate o non ancora divulgate al mercato al fine di compiere operazioni speculative in borsa e, quindi, fare profitti illecitamente nella compravendita di… …   Glossario di economia e finanza

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