5 ms·

Some of these guys just buy weekly options ahead of an earnings call, after a few hits it's basically screaming to some statistical algorithm at the SEC "hey, p

Some of these guys just buy weekly options ahead of an earnings call, after a few hits it's basically screaming to some statistical algorithm at the SEC "hey, please put me in jail!". Digging up admissible evidence is harder, though.

bpodgursky 5y ago
Maybe one of them cracked.
- droopyEyelids 5y ago
  They probably all cracked. The SEC could put them in a perfect "prisoner's dilemma" game and we're only talking about regular people, not hardened operators with like, a suicide capsule in their molar.
  - H8crilA 5y ago
    Yeah. Reminder: if you witness something of this sort consider using the SEC Whistleblower Office (http://sec.gov/whistleblower http://sec.gov/whistleblower). You'll get 10% - 30% of the collected fines, and there's a cottage industry of lawyers that will compile the case for you (or tell you that you don't actually have a good case, which I heard is actually common).
    - DaveExeter 5y ago
      Snitching is wrong.
      - H8crilA 5y ago
        It could be considered wrong, depending on your personal ethics. That's why I wrote "consider".
      - renewiltord 5y ago
        It’s not snitching. It’s predating on prey. If you don’t want to be prey, don’t try to insider trade where I can eat you.
      - ahtihn 5y ago
        Breaking the law is wrong. Snitching is a civic duty.
socialist_coder 5y ago
Do brokerages give all this info to the SEC so they can do this type of analysis and then be able to personally identify the buyers/sellers? It seems wrong that my personal info is being given out by my brokerage, in a way that lets them identify my personal trades.
- haney 5y ago
  Talked with an SEC guy at a conference one time, they have access to every order that touches any American exchange (filled or not) in a huge data warehouse, apparently most of this detection is just a series of SQL queries.
  - RobertoG 5y ago
    Inside trading of the information in that database would be something!
    - cyral 5y ago
      You can buy access to every trade being made (executed or not), but it won't have the information the SEC has like your name attached to it or if it was an opening or closing trade.
    - kenned3 5y ago
      you can find this information online, trades (orders after they have been completed) are "public knowledge". insiders are required to report their trades (search for "sec Edgar"). it is hard to make money knowing that a trade has taken place.. you need to know BEFORE and this is clearly illegal with very serious penalties (martha stewart served jail time...).
- empraptor 5y ago
  Might be a regulation that brokerages have to comply with? Seems like a reasonable solution if such regulation was made in order to detect insider trading.
alecst 5y ago
Yea, possibly this plus messaging metadata.
vineyardmike 5y ago
> Some of these guys just buy weekly options ahead of an earnings call, Obviously working for the company in question makes it different, but this doesn't seem crazy or unusual. I've worked placed where it was very easy to predict the stock movements ahead of earnings call since the company's success/failure is in public eye a lot (same true for netflix?). The top 5 companies in terms of market cap get lots of attention and analysis. I bet most people could review that data before the earnings call and guess the movement of the stock enough to make money. Again, i would never touch my companies stock on the market but it doesn't seem like you need insider knowledge at a lot of big companies.
- H8crilA 5y ago
  Then why aren't you a multi-millionaire yet? One can easily multiply their pot every 3 months playing a few companies with simple option strategies, provided it's really that predictable. More importantly, if this is predictable then why is there volatility around earnings? Surely enough people would have figured it out by now.
  - vineyardmike 5y ago
    > Then why aren't you a multi-millionaire yet? Well, as you said, not everything is a win, and sometimes you lose. Some people don't have the money to deal with options and handle a loss. But who said i wasn't a millionaire ;)
  - smabie 5y ago
    How do you know he isn't?
    - rurp 5y ago
      Okay then, why aren't a million people doing it to the point where the "free" money has been squeezed out of the price?
      - vineyardmike 5y ago
andylynch 5y ago
Not legal advice but in many common jurisdictions that would not necessary be a offence since they aren’t acting on inside information but rather executing planned trades. Though it would likely raise eyebrows and one would need to be mindful of related concerns like closed periods in the securities, which are far easier to monitor.

bpodgursky 5y ago

Maybe one of them cracked.

droopyEyelids 5y ago
They probably all cracked. The SEC could put them in a perfect "prisoner's dilemma" game and we're only talking about regular people, not hardened operators with like, a suicide capsule in their molar.
- H8crilA 5y ago
  Yeah. Reminder: if you witness something of this sort consider using the SEC Whistleblower Office (http://sec.gov/whistleblower http://sec.gov/whistleblower). You'll get 10% - 30% of the collected fines, and there's a cottage industry of lawyers that will compile the case for you (or tell you that you don't actually have a good case, which I heard is actually common).
  - DaveExeter 5y ago
    Snitching is wrong.
    - H8crilA 5y ago
      It could be considered wrong, depending on your personal ethics. That's why I wrote "consider".
    - renewiltord 5y ago
      It’s not snitching. It’s predating on prey. If you don’t want to be prey, don’t try to insider trade where I can eat you.
    - ahtihn 5y ago
      Breaking the law is wrong. Snitching is a civic duty.

socialist_coder 5y ago

Do brokerages give all this info to the SEC so they can do this type of analysis and then be able to personally identify the buyers/sellers? It seems wrong that my personal info is being given out by my brokerage, in a way that lets them identify my personal trades.

haney 5y ago
Talked with an SEC guy at a conference one time, they have access to every order that touches any American exchange (filled or not) in a huge data warehouse, apparently most of this detection is just a series of SQL queries.
- RobertoG 5y ago
  Inside trading of the information in that database would be something!
  - cyral 5y ago
    You can buy access to every trade being made (executed or not), but it won't have the information the SEC has like your name attached to it or if it was an opening or closing trade.
  - kenned3 5y ago
    you can find this information online, trades (orders after they have been completed) are "public knowledge". insiders are required to report their trades (search for "sec Edgar"). it is hard to make money knowing that a trade has taken place.. you need to know BEFORE and this is clearly illegal with very serious penalties (martha stewart served jail time...).
empraptor 5y ago
Might be a regulation that brokerages have to comply with? Seems like a reasonable solution if such regulation was made in order to detect insider trading.

alecst 5y ago

Yea, possibly this plus messaging metadata.

vineyardmike 5y ago

> Some of these guys just buy weekly options ahead of an earnings call, Obviously working for the company in question makes it different, but this doesn't seem crazy or unusual. I've worked placed where it was very easy to predict the stock movements ahead of earnings call since the company's success/failure is in public eye a lot (same true for netflix?). The top 5 companies in terms of market cap get lots of attention and analysis. I bet most people could review that data before the earnings call and guess the movement of the stock enough to make money. Again, i would never touch my companies stock on the market but it doesn't seem like you need insider knowledge at a lot of big companies.

H8crilA 5y ago
Then why aren't you a multi-millionaire yet? One can easily multiply their pot every 3 months playing a few companies with simple option strategies, provided it's really that predictable. More importantly, if this is predictable then why is there volatility around earnings? Surely enough people would have figured it out by now.
- vineyardmike 5y ago
  > Then why aren't you a multi-millionaire yet? Well, as you said, not everything is a win, and sometimes you lose. Some people don't have the money to deal with options and handle a loss. But who said i wasn't a millionaire ;)
- smabie 5y ago
  How do you know he isn't?
  - rurp 5y ago
    Okay then, why aren't a million people doing it to the point where the "free" money has been squeezed out of the price?
    - vineyardmike 5y ago

andylynch 5y ago

Not legal advice but in many common jurisdictions that would not necessary be a offence since they aren’t acting on inside information but rather executing planned trades. Though it would likely raise eyebrows and one would need to be mindful of related concerns like closed periods in the securities, which are far easier to monitor.