5 ms·

>This is mostly to ensure people keep trading. In a world were inside-info is commonplace, trading without it is just stupid. I find this line of reasoning har

>This is mostly to ensure people keep trading. In a world were inside-info is commonplace, trading without it is just stupid. I find this line of reasoning hard to swallow. As an individual I have significantly less info than hedge funds and other professionals but that doesn't change the fact that I want to buy Apple or whatever because I think it will grow over the next 5 years. Now if you add in the scenario where all of the Apple employees are buying and selling based on unreleased earnings, that doesn't change my want to buy the stock at all. How does Tim Cook buying some Apple shares right before good earnings change anything for a regular investor?

throwawaymath 8y ago
Tim Cook (and all other Apple employees) are legally disallowed from buying or selling Apple stock outside of specific, well-defined trading windows. In particular, they cannot legally benefit from unpublished earnings information.
- saagarjha 8y ago
  > all other Apple employees) are legally disallowed from buying or selling Apple stock outside of specific, well-defined trading windows I don't think this is true, at least for most employees. I think this only applies at higher levels, though of course insider trading laws are still in force.
rocqua 8y ago
It is not so much about the retail investors as it is about the professionals. Most of the market is determined by them, in a world without them, prices will less accurately reflect the 'true value' of stocks. As such, we want to keep them trading. We also kind of want to dis-incentivize the professional traders from engaging in massive corporate espionage. Just because that is an arms-race that isn't very productive.
- runeks 8y ago
  You keep saying "we" -- who are you speaking for? Your argument that professional traders would stop trading in unison if insider trading laws were abolished seems entirely unconvincing to me.

throwawaymath 8y ago

Tim Cook (and all other Apple employees) are legally disallowed from buying or selling Apple stock outside of specific, well-defined trading windows. In particular, they cannot legally benefit from unpublished earnings information.

saagarjha 8y ago
> all other Apple employees) are legally disallowed from buying or selling Apple stock outside of specific, well-defined trading windows I don't think this is true, at least for most employees. I think this only applies at higher levels, though of course insider trading laws are still in force.

rocqua 8y ago

It is not so much about the retail investors as it is about the professionals. Most of the market is determined by them, in a world without them, prices will less accurately reflect the 'true value' of stocks. As such, we want to keep them trading. We also kind of want to dis-incentivize the professional traders from engaging in massive corporate espionage. Just because that is an arms-race that isn't very productive.

runeks 8y ago
You keep saying "we" -- who are you speaking for? Your argument that professional traders would stop trading in unison if insider trading laws were abolished seems entirely unconvincing to me.