4 ms·

I maybe wrong, but I was under the impression that trades are essentially anonymous unless they are for a significant percentage of the stock.

esoterica 6y ago
They are anonymous to other participants, not the SEC
WJW 6y ago
It really depends on what you are trading. For example the prototype of a "dumb" insider trade is getting OTM call options when you know a company is getting a blowout quarter. Large amounts of OTM options trading in a stock that rarely sees much options activity is quite noticeable. When the authorities notice those, they can (and do) find out who got into that position simply by calling all the registered brokers and asking them who did it. (With a court order if need be, because suspicious options activity just before large jumps in stock price is reasonable suspicion of insider trading)
elliekelly 6y ago
Any time there’s a big swing the SEC requests data for transactions before and after. The time period of their requests vary but sometimes they ask for transactions months in advance to look for unusual patterns of activity. Insider trading is a particularly stupid move because it’s only a matter of time before you get caught.
ABeeSea 6y ago
The FINRA database available to regulators is an amazing engineering achievement. It knows all and is how the SEC is able to “replay” the markets after the fact. Four year old blog post, but gives a sense of scale: https://aws.amazon.com/blogs/publicsector/analytics-without-limits-finras-scalable-and-secure-big-data-architecture-part-1/ https://aws.amazon.com/blogs/publicsector/analytics-without-...
jbritton 6y ago
I once bought stock in EBIX. Not too long after I purchased I woke up one day to find the stock down 50%. An anonymous poster on Seeking Alpha had written an article claiming massive accounting fraud at EBIX. There was massive short selling that morning. After following forums and news on EBIX it appeared that there likely was not fraud. The stock would slowly recover, and then another hit piece followed by short selling would massively drop the stock again. This went on for a couple years. There never was any fraud. I sold the stock and swore off buying individual stocks. I’m 100% convinced there was illegal trading activity. Many people in the forums wrote to the SEC about it. The SEC never did anything. It also seemed like this goes on all the time.
- notimetorelax 6y ago
  Just diversify, putting all your money into a single company comes with that kind of risk.
- arthurcolle 6y ago
  Their current market cap is <1Bn. Trading in single names without having some sort of sophisticated fundamental model is seriously inadvisable, especially without some kind of serious trade execution edge. Sorry for your loss, but it's just a bad idea... Develop better models. Any stock that can move 50% in a day, even in retrospect, isn't a serious company to invest in. Stick to TSLA ;) /s

esoterica 6y ago

They are anonymous to other participants, not the SEC

WJW 6y ago

It really depends on what you are trading. For example the prototype of a "dumb" insider trade is getting OTM call options when you know a company is getting a blowout quarter. Large amounts of OTM options trading in a stock that rarely sees much options activity is quite noticeable. When the authorities notice those, they can (and do) find out who got into that position simply by calling all the registered brokers and asking them who did it. (With a court order if need be, because suspicious options activity just before large jumps in stock price is reasonable suspicion of insider trading)

elliekelly 6y ago

Any time there’s a big swing the SEC requests data for transactions before and after. The time period of their requests vary but sometimes they ask for transactions months in advance to look for unusual patterns of activity. Insider trading is a particularly stupid move because it’s only a matter of time before you get caught.

ABeeSea 6y ago

The FINRA database available to regulators is an amazing engineering achievement. It knows all and is how the SEC is able to “replay” the markets after the fact. Four year old blog post, but gives a sense of scale: https://aws.amazon.com/blogs/publicsector/analytics-without-limits-finras-scalable-and-secure-big-data-architecture-part-1/ https://aws.amazon.com/blogs/publicsector/analytics-without-...

jbritton 6y ago

I once bought stock in EBIX. Not too long after I purchased I woke up one day to find the stock down 50%. An anonymous poster on Seeking Alpha had written an article claiming massive accounting fraud at EBIX. There was massive short selling that morning. After following forums and news on EBIX it appeared that there likely was not fraud. The stock would slowly recover, and then another hit piece followed by short selling would massively drop the stock again. This went on for a couple years. There never was any fraud. I sold the stock and swore off buying individual stocks. I’m 100% convinced there was illegal trading activity. Many people in the forums wrote to the SEC about it. The SEC never did anything. It also seemed like this goes on all the time.

notimetorelax 6y ago
Just diversify, putting all your money into a single company comes with that kind of risk.
arthurcolle 6y ago
Their current market cap is <1Bn. Trading in single names without having some sort of sophisticated fundamental model is seriously inadvisable, especially without some kind of serious trade execution edge. Sorry for your loss, but it's just a bad idea... Develop better models. Any stock that can move 50% in a day, even in retrospect, isn't a serious company to invest in. Stick to TSLA ;) /s