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It’s not insider information. You might consider it material non-public information, which you can’t trade on in Europe, but in the US insider trading has a muc
by dan-robertson 6y ago
It’s not insider information. You might consider it material non-public information, which you can’t trade on in Europe, but in the US insider trading has a much more narrow definition: roughly it has to come from the insiders of the company. If your friend at Microsoft tells you that they won some massive contract, you can’t trade on it. If you overhear that news in a café, you can. If your friend at the government tells you they’re going to agree on a big contract with Microsoft, I don’t know if you’d be allowed or not but if you weren’t allowed I don’t think it would be insider trading.
Anyway, that obviously isn’t legal advice. And I agree that people should expect legislators to act with high integrity, but that’s not really how they vote.
- BurningFrog 6y agoHonest question: If I work at Microsoft and I know we'll launch a product that will kill competitor X, am I allowed to short the X stock? That more analogous to the politician trading. They do have inside information, but it's not from inside the company they're trading.
- iudqnolq 6y agoNo, because that would be considered "stealing" from Microsoft. (I think it's a stupid way to define it.)
- godelski 6y agoThanks! I actually appreciate the nuanced correction. I used insider trading as the term not specifically because the information was non-public but that it feels like they have inside knowledge since they are able to directly affect the markets. Maybe there is a better term for this? I don't think this still falls under what you said.
- echaozh 6y agoMarket manipulation?