4 ms·

Let's say you live in front of the Splunk office, and you see tens of people in suits, a limo with a CISCO sticker, as well as a lot of commotion on the office

by sakex 3y ago

Let's say you live in front of the Splunk office, and you see tens of people in suits, a limo with a CISCO sticker, as well as a lot of commotion on the office in front of you. You strongly suspect something is happening, you buy $22k of Splunk calls. Is that insider trading?

ar_lan 3y ago
Disclaimer: not financial advice I don't think so, it happened publicly, you weren't privvy to classified details. I would go for it if I were in that scenario.
- sakex 3y ago
  If it's legal, it means that somebody could write a model that could predict mergers pretty accurately and make a lot of money. For instance, by tracking flight patterns of C-suites executives, scanning car brands in parkings next to offices using satellite images, and analysing working hours of the staff (this can be done in multiple ways like sending e-mails to check of automated OOO responses or analysing the light coming out of the building from satellite images.)
  - ar_lan 3y ago
    I think some analysts have been doing flight analysis for a long time to help inform trades. Everything you listed is publicly accessible knowledge (there is an interesting conversation over the fact that a poor person is unlikely to have the available means to attain this information) and I think should be fair game. But I really have not done the legal research to confidently give you a “Yes” and willfully will exit so I don’t get some SEC agent knocking on my door.
  - JumpCrisscross 3y ago
    > by tracking flight patterns of C-suites executives, scanning car brands in parkings next to offices using satellite images This was old enough to be the stuff of office legends fifteen years ago. (Also, flying drones to thermally image petroleum tankers to infer their levels.)
  - tqi 3y ago
    A version of this is already happening: https://www.theatlantic.com/magazine/archive/2019/05/stock-value-satellite-images-investing/586009/ https://www.theatlantic.com/magazine/archive/2019/05/stock-v...
  - flangola7 3y ago
    This happens already.
  - burkaman 3y ago
    You can buy the flight data right from Nasdaq if you want to: https://data.nasdaq.com/alternative-data/corporate-aviation-intelligence https://data.nasdaq.com/alternative-data/corporate-aviation-... But if it's that easy that means other people are already doing it and you probably can't make any money. Plenty of companies will help you monitor parking lots too: https://orbitalinsight.com/geospatial-solutions/financial-services https://orbitalinsight.com/geospatial-solutions/financial-se..., https://rsmetrics.com/asset-tracker/ https://rsmetrics.com/asset-tracker/ The general term for this stuff is "alternative data".
  - mkii 3y ago
    Hypothetically, if you assume somebody else will go through all that, wouldn't it be easier to acquire market data and follow unusual trades?
user3939382 3y ago
If I may comment on this issue in the abstract: don't count on technicalities to get you out of legal trouble. Those are fine if you're very wealthy and have money for the types of lawyers and appeals that can use them. For everyone else, you don't want to be so close to the line that you end up losing because the judge doesn't like your face and woke up on the wrong side of the bed.
francisofascii 3y ago
And what if you are the caterer being sent to the Splunk office to deliver some lavish celebratory meal?
n2d4 3y ago
I'm not a lawyer, and I'm sure there's one that would make the argument that it is. But generally, hedge funds do very similar things to predict mergers: https://www.bloomberg.com/news/articles/2019-07-02/hedge-funds-are-tracking-private-jets-to-find-the-next-megadeal https://www.bloomberg.com/news/articles/2019-07-02/hedge-fun...
BonoboIO 3y ago
Would I be able to see such a trade when the trader makes them and just copy the trade with a small amount. Thinking is: „Who the hell would make such a trade if he doesn’t have some information, let’s do the same“
sigwinch28 3y ago
Based on the compliance training I did this week at a hedge fund… On the condition that you acted solely on information that was already public, or something that happened in a public place that you happened to witness as a bystander… No, that is not usually considered insider trading. Not a lawyer, not advice.
harisec 3y ago
You still don't know the exact date of the potential acquisition. So you cannot make a successful trade. I would say it's not insider trading.

by sakex 3y ago

ar_lan 3y ago

Disclaimer: not financial advice I don't think so, it happened publicly, you weren't privvy to classified details. I would go for it if I were in that scenario.

sakex 3y ago
If it's legal, it means that somebody could write a model that could predict mergers pretty accurately and make a lot of money. For instance, by tracking flight patterns of C-suites executives, scanning car brands in parkings next to offices using satellite images, and analysing working hours of the staff (this can be done in multiple ways like sending e-mails to check of automated OOO responses or analysing the light coming out of the building from satellite images.)
- ar_lan 3y ago
  I think some analysts have been doing flight analysis for a long time to help inform trades. Everything you listed is publicly accessible knowledge (there is an interesting conversation over the fact that a poor person is unlikely to have the available means to attain this information) and I think should be fair game. But I really have not done the legal research to confidently give you a “Yes” and willfully will exit so I don’t get some SEC agent knocking on my door.
- JumpCrisscross 3y ago
  > by tracking flight patterns of C-suites executives, scanning car brands in parkings next to offices using satellite images This was old enough to be the stuff of office legends fifteen years ago. (Also, flying drones to thermally image petroleum tankers to infer their levels.)
- tqi 3y ago
  A version of this is already happening: https://www.theatlantic.com/magazine/archive/2019/05/stock-value-satellite-images-investing/586009/ https://www.theatlantic.com/magazine/archive/2019/05/stock-v...
- flangola7 3y ago
  This happens already.
- burkaman 3y ago
  You can buy the flight data right from Nasdaq if you want to: https://data.nasdaq.com/alternative-data/corporate-aviation-intelligence https://data.nasdaq.com/alternative-data/corporate-aviation-... But if it's that easy that means other people are already doing it and you probably can't make any money. Plenty of companies will help you monitor parking lots too: https://orbitalinsight.com/geospatial-solutions/financial-services https://orbitalinsight.com/geospatial-solutions/financial-se..., https://rsmetrics.com/asset-tracker/ https://rsmetrics.com/asset-tracker/ The general term for this stuff is "alternative data".
- mkii 3y ago
  Hypothetically, if you assume somebody else will go through all that, wouldn't it be easier to acquire market data and follow unusual trades?

user3939382 3y ago

If I may comment on this issue in the abstract: don't count on technicalities to get you out of legal trouble. Those are fine if you're very wealthy and have money for the types of lawyers and appeals that can use them. For everyone else, you don't want to be so close to the line that you end up losing because the judge doesn't like your face and woke up on the wrong side of the bed.

francisofascii 3y ago

And what if you are the caterer being sent to the Splunk office to deliver some lavish celebratory meal?

n2d4 3y ago

I'm not a lawyer, and I'm sure there's one that would make the argument that it is. But generally, hedge funds do very similar things to predict mergers: https://www.bloomberg.com/news/articles/2019-07-02/hedge-funds-are-tracking-private-jets-to-find-the-next-megadeal https://www.bloomberg.com/news/articles/2019-07-02/hedge-fun...

BonoboIO 3y ago

Would I be able to see such a trade when the trader makes them and just copy the trade with a small amount. Thinking is: „Who the hell would make such a trade if he doesn’t have some information, let’s do the same“

sigwinch28 3y ago

Based on the compliance training I did this week at a hedge fund… On the condition that you acted solely on information that was already public, or something that happened in a public place that you happened to witness as a bystander… No, that is not usually considered insider trading. Not a lawyer, not advice.

harisec 3y ago

You still don't know the exact date of the potential acquisition. So you cannot make a successful trade. I would say it's not insider trading.