14 ms·

Is it insider trading if I bought Boeing puts while inside the wrecked airplane?

525 points by wazbug 3y ago

curiousgal 3y ago
I would expect the answer to depend on the jurisdiction, Insider Trading is defined differently in US Vs other countries.
shove 3y ago
lol no, but also ssshhhhhhhh
ackbar03 3y ago
My man you deserve every dollar you make from that trade
ghaff 3y ago
IANAL, but I don't see how. If you're just an ordinary person, you're trading based on an event you witnessed in the course of going about your life. No different I would think than if you witnessed a plane crash. You might be investigated though if the amounts were large enough. It gets much more complicated I would think if you were an air traffic controller or otherwise learned about it in a professional capacity.
- judge2020 3y ago
  I think it's mostly a joke, the original post is from Reddit r/WallStreetBets. But regarding Air Traffic controllers, it appears they are barred from owning airline stock https://www.law.cornell.edu/cfr/text/5/6001.104 https://www.law.cornell.edu/cfr/text/5/6001.104 (b)
  - dataflow 3y ago
    That sounds like it's not really about insider trading but rather about quality of service and avoiding perverse incentives? So different entities don't get different treatment by ATC. In particular note that the requirement is about lacking financial interests at all, not merely about avoiding trading.
  - pfdietz 3y ago
    I more hope they're barred from shorting airline stock. :)
    - HWR_14 3y ago
      They're barred from trading anything the SEC regulates (including options and shorted stock) with regards to airline, airplane manufacturer or airplane part manufacturer stocks. There is an exception allowing them to indirectly own them (like through mutual/index funds).
    - SilasX 3y ago
      “But I did even better than owning zero airline stock. I own a negative amount!”
  - SV_BubbleTime 3y ago
    I would love to see congressional members and their families banned from the same. It’s a big ask though. Where do you draw the line? So either that, or I can get Pelosi ETF.
    - whycome 3y ago
      Has someone done that? Created a virtual etf of pelosi’s stocks?
      - judge2020 3y ago
        Yes https://www.thestreet.com/etffocus/blog/want-to-trade-stocks-like-nancy-pelosi-an-etf-for-that https://www.thestreet.com/etffocus/blog/want-to-trade-stocks... But there is a very high expense ratio.
- phkahler 3y ago
  >> It gets much more complicated I would think if you were an air traffic controller or otherwise learned about it in a professional capacity. I think even a Boeing employee would not be guilty. The event happened in public and it should make no difference since the non employee next to them would not be trading on insider info either. The information did not come from inside the company.
- antasvara 3y ago
  >It gets much more complicated I would think if you were an air traffic controller or otherwise learned about it in a professional capacity. IANAL, but I am curious if ATC radio communications are considered public. My understanding is that it is legal to listen to ATC radio; if that's the case, is the plane crashing "public information" right after you relay the info over the radio?
  - ghaff 3y ago
    As a random individual, almost certainly. I can do lots of (legal) things to ferret out information that is theoretically public but which isn't actually widely known. As an insider it's more complicated as I understand it. A company I worked for had a no trade window around earnings reports. The idea is that not only couldn't you trade on advance information but you also couldn't trade before investors had time to price the results into the stock. In other word, you couldn't trade based on the results you knew were coming a microsecond after the results hit the wire. (The HFTs would probably beat you anyway but I digress.)
    - dataflow 3y ago
      IANAL but I imagine corporate policies are stricter than the law here. I have a hard time imagining people getting prosecuted for "insider trading" based on earnings reports half an hour after they become public, but trading windows still generally prohibit that.
      - ghaff 3y ago
        You're right. Caesar's wife beyond reproach and all that applies. Especially these days with computer algorithms, the idea that it might take a couple of days to price in an earnings report is pretty silly probably. (And if an employee knows a lot of dirty laundry behind the public numbers, an extra day or two probably doesn't make much of a difference anyway.)
    - fbdab103 3y ago
      There was a legal case where the speed of light was used to identify insider trading. Information was publicly disclosed at (fake numbers) 12:00:00:001, yet trades benefiting from the information came at 12:00:00:002, which was faster than possible for the information to have been learned and acted upon by the involved parties. https://www.theverge.com/2013/10/3/4798542/whats-faster-than-a-light-speed-trade-inside-the-sketchy-world-of https://www.theverge.com/2013/10/3/4798542/whats-faster-than...
- Ekaros 3y ago
  Like if you were mechanic for the airline and got message that we will be landing with missing door. And then traded stock of airline on that information. Being in the crew of the plane might get more messy at least when done with airline. Boeing less so.
  - fbdab103 3y ago
    This is the part which I find really sticky. What about all of the non-Boeing employees who interface with the equipment for their job? The pilot, flight attendants, air traffic control, EMTs, etc. They have no direction association with Boeing, yet you could make an argument it was part of their responsibilities. On the other hand, if your employer gives you X-brand wrenches, which frequently fall apart in your hands during routine operation, that seems like actionable information on which you would be justified to act.
    - graphe 3y ago
      Like all laws it's about enforcement. They can say whatever they want we know "insider trading" is a natural human response to information. Unless they can prove it was insider trading it isn't.
Fezzik 3y ago
Original post from 16 days ago: https://news.ycombinator.com/item?id=38948827 https://news.ycombinator.com/item?id=38948827
voakbasda 3y ago
Isn't the practical answer: "it depends on which way the wind is blowing when the regulators or courts make their decisions"? If they want to get you for something, they will find a way.
- cedws 3y ago
  Pretty much, no? Congress insider trade all the time and AFAIK they have not been reprimanded. It's OK for some to do it, but not others.
eschneider 3y ago
It's not if you don't have a fiduciary duty to Boeing.
- tsimionescu 3y ago
  That's not correct. If you trade on information tipped to you by insiders, you are also guilty of insider trading, even though you didn't have any fiduciary duty towards the company.
  - pfdietz 3y ago
    If you overhear insiders discussing something, say in a restaurant, you aren't an insider (and I believe there is case law on just that point). In general, you need to have encouraged or conspired with the leaker, if I understand correctly.
ejb999 3y ago
of course not - you are not an 'insider' if all you are as a customer with a bad experience - no different than you buying puts on restaurant where you think the food is terrible or even made you sick.
- cqqxo4zV46cp 3y ago
  You’re “insider” the airplane!
KieranMac 3y ago
No, it is not. If you do not have a fiduciary relationship with Boeing and you have no confidentiality obligations with respect to the information, you are not trading on inside information. If you're in the plane when the door blows up, you're just the first person with material public information. You're not trading on material non-public information. See, e.g. https://www.law.cornell.edu/wex/misappropriation_theory_of_insider_trading https://www.law.cornell.edu/wex/misappropriation_theory_of_i...
- arsome 3y ago
  This is just news trading, you're just really fast because you're the headline.
- labrador 3y ago
  I love answers like this because it clears up confusion in few words and makes the answer obvious in retrospect
  - abm53 3y ago
    It’s often a dangerous kind of answer. I once saw somebody say something to the effect that in every Hacker News thread, there is always a highly upvoted comment that sounds completely plausible, well argued, made by somebody who appears highly qualified to answer, and that is completely incorrect. I don’t think it’s always true, but it often is.
  - SoylentOrange 3y ago
    Unfortunately in this case the answer as written is completely wrong. See the top reply. > If you do not have a fiduciary relationship with Boeing and you have no confidentiality obligations with respect to the information, you are not trading on inside information. Specifically this part. One of the first things you learn when doing mandatory insider trading training is you can easily run afoul of the law if you act on non-public info you overheard, or happened to see by accident, even if it has to do with some company with which you are not affiliated. A common example is you’re in a coffee shop and see an upcoming earnings report on someone else’s laptop screen, then trade based on that information.
tester756 3y ago
It's is just a meme
philwelch 3y ago
This is a good opportunity to point out that insider trading is a victimless crime. If you sell stock with insider knowledge, you sell it to someone who would have happily bought it at the same price or possibly a higher price from someone else anyway. The same is true if you buy stock with insider knowledge. The only net effect of insider trading is to make the market more efficient by pricing in otherwise inaccessible information.
- kevinmchugh 3y ago
  If I work for Apple and I'm on the special secret new Apple Glasses project, I reasonably know that when the product is announced the stock is going to go up. That information belongs to Apple, not me. Apple could sell more shares to capitalize on the announcement. By buying shares before the announcement, I'm capturing some of the gain that should be Apple's.
  - HPsquared 3y ago
    If the company itself was to buy its own stock based on non-public information, wouldn't that also be insider trading? The corporate entity itself is, like, the ultimate insider.
  - filoleg 3y ago
    That's why companies like Apple have very strongly enforced rules related to this for their employees, like blackout windows on trading AAPL shares and not allowing them trading AAPL shares at all. And there are even more restrictions for those working on certain teams and in certain areas (e.g., finance/accounting). Buying/selling right before the big announcement or earnings reports is straight up not allowed. I don't know the actual dates for Apple (as I only have friends working there, I haven't worked there myself, and I didn't quite care to ask for the exact length of trading blackout windows). But I know for a fact myself that at Google you get a trading blackout window that starts around 3-4 weeks before the quarterly earnings announcements and ends around a week or so after. And you are not allowed to trade GOOG options at all while an emlpoyee, not even outside of those trading blackout windows. There are additional blackout windows as well, but that's beside the point, and I don't remember them off the top of my head. And that's just for a run-off-the-mill software engineer working on an internal infra product that isn't some super-top-secret thing.
cedws 3y ago
I've been thinking about building a system that would enable me to quickly react to black swan events like this should they happen around me in daily life. The problem is that most of my funds are in savings accounts that take 1-2 business days to withdraw from, so I'd have to keep them in accounts that are faster to access. Also, this information that the passengers had in advance could have been worth millions in the right hands. If you had information like this, how could you quickly find parties interested in buying this information or giving you a share of potential gains?
- clbrmbr 3y ago
  Verification of time-sensitive rare events from strangers is hard. But I can see how that could really increase your potential winnings.
barbazoo 3y ago
Why would it be it’s public information at that point.
deleted 3y ago
[deleted]
zilti 3y ago
I'm slightly disappointed that the question was only hypothetical.
- charlieyu1 3y ago
  In 2017 someone bought put options of Dortmund football team and bomb the team bus. I guess the circumstances are slightly different.
pavlov 3y ago
Is it insider trading if you sold Microsoft stock short because Windows gave you a BSOD? Clearly not. The question is only raised because airplane failures are much more rare than software failures.
- mathiasgredal 3y ago
  Well, if I found an unpatchable zero-click RCE exploit on an iPhone, then that would have a major effect on the stockprice when the news is announced. It definitely seems like it would be insider trading if i used that knowledge to do options trading.
  - patmorgan23 3y ago
    Only if you were an employee of apple (or one of its vendors working on the iPhone). If you independently discovered it, any other member of the public could have discovered it (assuming they had the skills and time).
    - pavlov 3y ago
      This is basically how professional short sellers like Citron Research and Muddy Waters work. They spend months doing research and if it’s promising they first build their short positions, then publish the research. Often just being targeted by these famous short sellers will crash the stock. But it’s not insider trading because their research was independently sourced.
kazinator 3y ago
No, you're not a Boeing insider by sitting inside their plane; that's weapons-grade word semantic equivocation.
hnbear 3y ago
Matt Levine covered this well too: https://archive.is/Kd6Os https://archive.is/Kd6Os The answer being no, because as a consumer you have no duty of confidentiality.
- SV_BubbleTime 3y ago
  It’s a better question to see if it meets colloquial definitions of arbitrage. It’s an advantage only a few people have, and you paid something in order to be put in that position.
  - hnbear 3y ago
    You paid to be in the plane. I doubt anyone paid specifically to be in a plane with the hope that a door would blow off to take advantage of information asymmetry in the aircraft manufacturer's stock (or the airline's stock).
- intrasight 3y ago
  What if in the fine print of your ticket purchase was an NDA clause?
  - whycome 3y ago
    Now you’re gonna have terms like that on your next ticket. And you’ll get charged a fee for the privilege.
  - jowea 3y ago
    IANAL and it depends by jurisdiction but I don't you can stick whatever you want in those sort of shrink-wrap contracts. And according to this site[1] there's at least one (Finland) where surprising terms specifically are not allowed. [1] https://www.dlapiperintelligence.com/goingglobal/intellectual-property/index.html?t=commercial-contract-considerations&s=enforceability-of-terms https://www.dlapiperintelligence.com/goingglobal/intellectua...
- kristianp 3y ago
  "if you are just a regular person and you go to McDonald’s and buy a burger and say “this burger tastes bad, I’m gonna short the stock,” that’s fine, that’s legitimate research. ... People are supposed to go around observing companies’ products and services, evaluating them, and incorporating those evaluations into their investment decisions. That’s how stock prices become efficient and how capital gets allocated to good uses rather than bad ones."
alexander2002 3y ago
Is it insider trading if i bought Tesla puts while inside the wrecked tsla ? Seems the intituive answer is no.
LASR 3y ago
Of course not. I could see the airplane lose a door in the sky and immediately short airline stocks. But so can anyone really. People watching all this have no control over the door actually falling off. Insiders have the ability to shift the course of the company. So the reason why we have this law is so that insiders don’t short their own stocks and then run the company into the ground, making guaranteed profits from that at the expense everyone else.
supportengineer 3y ago
Someone is going to write a trading bot that scans worldwide ADSB data, looking for sudden, unexplained altitude changes - Identify the airline and equipment type and short them both. Assuming this doesn't exist already.
- SV_BubbleTime 3y ago
  I’ve long thought that the airlines have systems that was sports leagues. That when team A is out of the running or team B makes it to championship that the price of tickets to or from are automatically adjusted m.
- deleted 3y ago
  [deleted]
gnicholas 3y ago
I recall learning in law school that “if there is no tipper there can be no tippee”. In order for there to be a tipper, the person has to have an intent to provide a tip improperly. Imagine there’s a CEO talking in an obscure foreign language in his own backyard, to a colleague on the phone, he is not a tipper — even if someone who happens to speak that obscure language is walking by his fence at that moment. As a result, that person cannot be a “tippee” because there was no tipper in the first place. I’m not sure that not being a tippee means you’re completely in the clear, since you have material information. But it’s presumably not non-public information since hundreds of people know it, and thousands more are finding out by the minute.
- Johnny555 3y ago
  >Imagine there’s a CEO talking in an obscure foreign language in his own backyard, to a colleague on the phone, he is not a tipper Is that actually true? I could believe it if he were speaking in a cryptographic code, but even an obscure language has more than one speaker so he shouldn't be revealing corporate secrets where he can be overheard even if he's speaking a foreign language.
  - s0rce 3y ago
    Apparently there are a few languages with only 2 speakers left, so I guess in that case its true.
  - gnicholas 3y ago
    Technically he wouldn’t be a tipper (vis a vis the stranger on the other side of the fence) even if he were speaking English. To be a tipper one has to have intent to share the information inappropriately. I only included the language bit to make it clear he was taking some level of precaution, and had a reasonable expectation that he was not spreading the information around. Even carelessness does not make one a tipper vis a vis a stranger, IIRC. But it’s been a couple decades since law school, so I could be wrong, laws could have changed, etc.
clbrmbr 3y ago
Hmm. So a rouge Meta employee could put a barometric pressure monitor in Messenger or WhatsApp (that people use even without paid in-flight wifi) to detect depressurization and automatically short the airline and aircraft manufacturer.
- loeg 3y ago
  This would probably be violating the employee’s fiduciary duty to Meta.
  - deleted 3y ago
    [deleted]
  - MichaelBurge 3y ago
    But Meta the company could short the stock, and run a trading team using the information. It might be unwise because of bad PR, though.
    - loeg 3y ago
      Yes, exactly.
- wheybags 3y ago
  They wouldn't have to be rouge, they could be any colour really
- s0rce 3y ago
  Most phones got rid of the barometers.
  - deleted 3y ago
    [deleted]
- anonu 3y ago
  Complicated. You could just monitor commercial flights that take off and return to the same spot shortly after
np_tedious 3y ago
HN of a stack exchange of a reddit (special shoutout to Money Stuff)
bdcravens 3y ago
I wonder if the same would be true of the media that learn of events before they are publicized.
bfung 3y ago
The actual article was from Reddit’s r/wallstreetbets , where any excuse to post meme trades goes. Go read for fun.
BMc2020 3y ago
Ctrl-F Casino Royale During the film, the terrorist financier Le Chiffre uses a Ugandan warlord's money to short-sell stock in Skyfleet, thus betting the money on the company's failure. The banker plans to bring about said failure by destroying the company's prototype airliner. After his original bomb-maker is killed by James Bond in Madagascar, another is hired to complete the job. The bomb-maker infiltrates Miami International Airport and steals a fuel tanker; attaching a keyring-sized bomb to the vehicle. As he attempts to blow up the prototype with the truck he is intercepted by 007 and a fight ensues on-board. Eventually the terrorist is forced from his vehicle and Bond narrowly prevents the truck from colliding with the plane. With his plan foiled, Le Chiffre is left with a major financial loss and is forced to set up a high-stakes poker tournament at Casino Royale in Montenegro.
- jihadjihad 3y ago
  > is forced to set up a high-stakes poker tournament at Casino Royale And take a long pull from that inhaler of his.
- loceng 3y ago
  Huh, so sabotage of a flight on a plane where it's very plausibly related to ongoing quality control is a viable method of generating profit without suspicion - so long as the mechanic who sabotaged door to low off isn't the same one making playing the stock?
  - klyrs 3y ago
    I still don't think it counts as insider trading if an outsider sabotages the airplane and buys the puts. The sabotage itself is probably a dozen federal offenses (gasp, terrorism!) resulting in actual prison time; insider trading only gets a slap on the wrist.
    - loceng 3y ago
      Agreed, it wouldn't be insider trading - just fraud - with potential horrible unintended but predictable consequences; of which the person(s) buying the stock around that orchestrated event happens would be complicit in. There's probably far easier and more lucrative ways for clever criminals to execute on though.
alkonaut 3y ago
The interesting case of this question is mentioned in the comments to the question but not answered: what if you are the Boeing CEO, you have a ton of stock, and you are on the flight. Would it be insider information to tell your broker to sell evrything before the plane lands? It’s information about your company not known by the (wider) public but it’s also not information that it’s your job to protect or that you have any special access to? So if I understand correctly, it wouldn’t be insider trading in that case either?
- kosievdmerwe 3y ago
  If you're the CEO you're likely not allowed to trade this readily, no matter your reason. High-level execs tend to have to pre-declare sales and purchases months in advance.
deleted 3y ago
[deleted]
skynetv2 3y ago
This is clearly public information, it is not sensitive or restricted to the people with relationship with Boeing who are privy to this information.
dia80 3y ago
UK rules differ from the US there is a 3-point test for insider trading: 1. The information has to be specific - Yes - you should sell Boeing 2. Would a reasonable investor take this information into account when making a decision to trade - Yes - this seems quite clear 3. The information must be non public - IIRC disclosure to a large group of people - in this case the perhaps 200ish people on the plane knowing it had a problem would probably count as the information being public and thus this test is not met and you are free to trade - I think the bar is around 30 people I knew all those hours spent in compliance training would come in handy one day!
- Dracophoenix 3y ago
  On the third point, what if the plane was privately-owned or chartered?
  - user_7832 3y ago
    That's when you start counting the radio call to the tower + whatever other pilots are there in the area to hit the golden 30.
    - quickthrower2 3y ago
      On the plane you can see the hole in the side. That is more of a signal to sell than a mayday alone. Maybe.
- yieldcrv 3y ago
  The fourth point, which most comments seem to be missing: would a court and appeals court take that same stance? here in the US, quoting statutes on this topic is not useful because we also don’t have a specific statute, we have a couple of general fraud statutes that the regulator has contorted itself to fit scenarios in
- aneryx 3y ago
  So if this was a smaller plane with only 20 people on it, it could qualify as inside trading in the UK?
m3kw9 3y ago
You don’t work for that company so it only means you for the news the fastest. Even if you worked for Boeing, it is public news as soon as it happened. You just happen to know it the fastest. Pure alpha
worble 3y ago
"Also can someone please answer fast as we are descending very quickly"
deleted 3y ago
[deleted]
jedberg 3y ago
Of course not, because you learned the information yourself as an outsider. Just like the hedge funds that pay for satellite images of all of the WalMart parking lots in the country and count the cars to estimate year over year sales. It's information they have that no one else does, but they didn't get it from an insider.
- pcthrowaway 3y ago
  The real reason Walmart allows car campers to sleep in their parking lots...
- ehsankia 3y ago
  Exactly. It's literally called "insider trading". There's nothing "insider" about an customer discovering something about the company's product while using it. The source of the information was not from "inside" the company.
  - francisofascii 3y ago
    But the customer was literally “inside” the problematic plane. :)
    - Detrytus 3y ago
      But the plane is owned by the airline, not the manufacturer, so they are inside a Boeing, but they are not a Boeing insider.
- permo-w 3y ago
  this seems really obvious. you're not an insider if you're ... not an insider? how is this question even being considered
  - mixdup 3y ago
    You can still be guilty of insider trading and not be an insider. If you get inside information from an insider and trade on it, even though you are not an insider or even if you didn't know the person you got it from was an insider, you are still in violation of the law in the US
charlieflowers 3y ago
If members of Congress can make millions trading on info they get from sitting on key committees, then trading based on your first hand experience certainly should be ok.
- ponector 3y ago
  But you know that law applies differently to poor people and to wealthy and powerful people? Whatever is ok for congressman could not be ok for you.
  - quickthrower2 3y ago
    True but that goes beyond “is it illegal” to “will I be prosecuted for…”. Interestingly here I reckon even if illegal it is a bad look to go after a survivor of this.
amelius 3y ago
Is it insider trading if I bought Apple puts right after an auto update that crashes my phone?
ijhuygft776 3y ago
just dont tell anyone about it. /s
BurningFrog 3y ago
Trading on your phone outdoors is always safe!
choeger 3y ago
A hacker news post to a stack exchange question copied from reddit? At some point we might simply fuse these networks into one, don't we?
- quickthrower2 3y ago
  No! I like the firewalls between these networks thanks.
- EasyMark 3y ago
  no, think of it as a distributed network with manual switching (changing browser tabs, data cached/queued up in your brain)
zaat 3y ago
It can be more complicated, what if you are the pilot? > On August 15, 2006, it was revealed that Halutz sold off his investment portfolio three hours after two Israeli soldiers were captured by Hezbollah during the Zar'it-Shtula incident, leading to the war. While this action on the part of the chief of staff is technically legal and is only restricted (through blind trusteeship) from cabinet members, the State Comptroller Micha Lindenstrauss has called to expand it to the chief of staff and to other senior officials. Several Knesset members called for Halutz to offer his resignation and some members of the General Staff Forum commented that his resignation appeared inevitable https://en.wikipedia.org/wiki/Dan_Halutz#Investment_portfolio_scandal https://en.wikipedia.org/wiki/Dan_Halutz#Investment_portfoli...
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machomaster 3y ago
It's weird that nobody mentioned Hijack miniseries with Idris Elba yet.
- vpribish 3y ago
  because that's fiction?
  - machomaster 3y ago
    Casino Royale was mentioned, so no.
IAmGraydon 3y ago
Of course it’s not insider trading. My question is how did this make it to the top of the HN front page? It reads like something you might see on WallStreetBets.
- emi2k01 3y ago
  You're right, that's the original source of the question https://www.reddit.com/r/wallstreetbets/comments/1935frs/is_it_insider_trading_if_i_bought_boeing_puts/ https://www.reddit.com/r/wallstreetbets/comments/1935frs/is_...
  - quickthrower2 3y ago
    Top reply: crash was priced in before takeoff!
  - IAmGraydon 3y ago
    Now that's pretty funny! Good find.
pricees 3y ago
I remember reading that a journalist dig into some gossip about a business found there to be credible evidence of malfeasance, sold the stock short, published the article, and was convicted of insider trading. I cannot find any of the details, but I recall reading this somewheres. Insider trading is whatever the govt said it is, which is why Martha Stewart went to jail, and walk street bankers just pay fines.
jbverschoor 3y ago
Im not sure how much more inside someone could be
- mkl 3y ago
  Inside the company Boeing, which is what counts.
vpribish 3y ago
no. this is a clickbait, bullshit, question that's been making the rounds of social media for weeks. You'd think that people here would not fall for this crap
motohagiography 3y ago
Already imagining a black mirror Nosedive app that recognizes products in your location and environment and presents offers to buy or sell the stock of the companies that produce them based on your experiences of the produts in the moment. The irony is of course is the adage, "Hate the service? Buy the stock" because it's so valuable people use it in spite of it sucking. Nobody ever thinks, 'this is terrible, how do I get long?' or, 'this is so awesome it can't possibly last, how to get short?', but that's how some traders make a living.
anonu 3y ago
The incident occurred at 526pm local time on the West Coast, so markets were closed. You wouldn't be able to trade. I'm a bit surprised that question is being asked. Fundamental investing is all about understanding things about a company that nobody else knows. This is an age old approach to investing. If you happen to stumble on that information, it doesn't make it insider trading. Where is crosses the line is if you're an insider and effectively breach your duty to the company or as a fiduciary. You're effectively stealing from the company. A passenger on an airline cannot steal information.
xarope 3y ago
Someone explain to me why is this any different to HFT bots trawling the web and reacting in microseconds to any adverse "news" about Boeing? ("news", since I'm not in that industry and don't know if they only react to official media, unofficial media - aka blogs etc, tweets, etc)
hakdbha 3y ago
[dead]
low_tech_punk 3y ago
Related to this, MIT professor Andrew Lo discussing stock price after Challenger rocket explosion. https://youtu.be/sMKQywwkIjQ?si=IXRB2iRZ0hPH3Sic&t=4633 https://youtu.be/sMKQywwkIjQ?si=IXRB2iRZ0hPH3Sic&t=4633
PlunderBunny 3y ago
From the headline, I thought this was going to be a link to an article on The Onion [1], or McSweeny's Internet Tendency [2]. [1]: https://www.theonion.com https://www.theonion.com [2]: https://www.mcsweeneys.net https://www.mcsweeneys.net
girafffe_i 3y ago
No, it's not material knowledge, it's just that you accessed public information first.
KETpXDDzR 3y ago
Recently, big airlines added the functionality to filter by airplane type. That comes in handy for such trading tricks. If you're employed with the airline, trade your insider informations instead of using it yourself. There are TOR websites to do so.

525 points by wazbug 3y ago

I would expect the answer to depend on the jurisdiction, Insider Trading is defined differently in US Vs other countries.

shove 3y ago

lol no, but also ssshhhhhhhh

ackbar03 3y ago

My man you deserve every dollar you make from that trade

ghaff 3y ago

IANAL, but I don't see how. If you're just an ordinary person, you're trading based on an event you witnessed in the course of going about your life. No different I would think than if you witnessed a plane crash. You might be investigated though if the amounts were large enough. It gets much more complicated I would think if you were an air traffic controller or otherwise learned about it in a professional capacity.

judge2020 3y ago
I think it's mostly a joke, the original post is from Reddit r/WallStreetBets. But regarding Air Traffic controllers, it appears they are barred from owning airline stock https://www.law.cornell.edu/cfr/text/5/6001.104 https://www.law.cornell.edu/cfr/text/5/6001.104 (b)
- dataflow 3y ago
  That sounds like it's not really about insider trading but rather about quality of service and avoiding perverse incentives? So different entities don't get different treatment by ATC. In particular note that the requirement is about lacking financial interests at all, not merely about avoiding trading.
- pfdietz 3y ago
  I more hope they're barred from shorting airline stock. :)
  - HWR_14 3y ago
    They're barred from trading anything the SEC regulates (including options and shorted stock) with regards to airline, airplane manufacturer or airplane part manufacturer stocks. There is an exception allowing them to indirectly own them (like through mutual/index funds).
  - SilasX 3y ago
    “But I did even better than owning zero airline stock. I own a negative amount!”
- SV_BubbleTime 3y ago
  I would love to see congressional members and their families banned from the same. It’s a big ask though. Where do you draw the line? So either that, or I can get Pelosi ETF.
  - whycome 3y ago
    Has someone done that? Created a virtual etf of pelosi’s stocks?
    - judge2020 3y ago
      Yes https://www.thestreet.com/etffocus/blog/want-to-trade-stocks-like-nancy-pelosi-an-etf-for-that https://www.thestreet.com/etffocus/blog/want-to-trade-stocks... But there is a very high expense ratio.
phkahler 3y ago
>> It gets much more complicated I would think if you were an air traffic controller or otherwise learned about it in a professional capacity. I think even a Boeing employee would not be guilty. The event happened in public and it should make no difference since the non employee next to them would not be trading on insider info either. The information did not come from inside the company.
antasvara 3y ago
>It gets much more complicated I would think if you were an air traffic controller or otherwise learned about it in a professional capacity. IANAL, but I am curious if ATC radio communications are considered public. My understanding is that it is legal to listen to ATC radio; if that's the case, is the plane crashing "public information" right after you relay the info over the radio?
- ghaff 3y ago
  As a random individual, almost certainly. I can do lots of (legal) things to ferret out information that is theoretically public but which isn't actually widely known. As an insider it's more complicated as I understand it. A company I worked for had a no trade window around earnings reports. The idea is that not only couldn't you trade on advance information but you also couldn't trade before investors had time to price the results into the stock. In other word, you couldn't trade based on the results you knew were coming a microsecond after the results hit the wire. (The HFTs would probably beat you anyway but I digress.)
  - dataflow 3y ago
    IANAL but I imagine corporate policies are stricter than the law here. I have a hard time imagining people getting prosecuted for "insider trading" based on earnings reports half an hour after they become public, but trading windows still generally prohibit that.
    - ghaff 3y ago
      You're right. Caesar's wife beyond reproach and all that applies. Especially these days with computer algorithms, the idea that it might take a couple of days to price in an earnings report is pretty silly probably. (And if an employee knows a lot of dirty laundry behind the public numbers, an extra day or two probably doesn't make much of a difference anyway.)
  - fbdab103 3y ago
    There was a legal case where the speed of light was used to identify insider trading. Information was publicly disclosed at (fake numbers) 12:00:00:001, yet trades benefiting from the information came at 12:00:00:002, which was faster than possible for the information to have been learned and acted upon by the involved parties. https://www.theverge.com/2013/10/3/4798542/whats-faster-than-a-light-speed-trade-inside-the-sketchy-world-of https://www.theverge.com/2013/10/3/4798542/whats-faster-than...
Ekaros 3y ago
Like if you were mechanic for the airline and got message that we will be landing with missing door. And then traded stock of airline on that information. Being in the crew of the plane might get more messy at least when done with airline. Boeing less so.
- fbdab103 3y ago
  This is the part which I find really sticky. What about all of the non-Boeing employees who interface with the equipment for their job? The pilot, flight attendants, air traffic control, EMTs, etc. They have no direction association with Boeing, yet you could make an argument it was part of their responsibilities. On the other hand, if your employer gives you X-brand wrenches, which frequently fall apart in your hands during routine operation, that seems like actionable information on which you would be justified to act.
  - graphe 3y ago
    Like all laws it's about enforcement. They can say whatever they want we know "insider trading" is a natural human response to information. Unless they can prove it was insider trading it isn't.

Fezzik 3y ago

Original post from 16 days ago: https://news.ycombinator.com/item?id=38948827 https://news.ycombinator.com/item?id=38948827

voakbasda 3y ago

Isn't the practical answer: "it depends on which way the wind is blowing when the regulators or courts make their decisions"? If they want to get you for something, they will find a way.

cedws 3y ago
Pretty much, no? Congress insider trade all the time and AFAIK they have not been reprimanded. It's OK for some to do it, but not others.

eschneider 3y ago

It's not if you don't have a fiduciary duty to Boeing.

tsimionescu 3y ago
That's not correct. If you trade on information tipped to you by insiders, you are also guilty of insider trading, even though you didn't have any fiduciary duty towards the company.
- pfdietz 3y ago
  If you overhear insiders discussing something, say in a restaurant, you aren't an insider (and I believe there is case law on just that point). In general, you need to have encouraged or conspired with the leaker, if I understand correctly.

ejb999 3y ago

of course not - you are not an 'insider' if all you are as a customer with a bad experience - no different than you buying puts on restaurant where you think the food is terrible or even made you sick.

cqqxo4zV46cp 3y ago
You’re “insider” the airplane!

KieranMac 3y ago

No, it is not. If you do not have a fiduciary relationship with Boeing and you have no confidentiality obligations with respect to the information, you are not trading on inside information. If you're in the plane when the door blows up, you're just the first person with material public information. You're not trading on material non-public information. See, e.g. https://www.law.cornell.edu/wex/misappropriation_theory_of_insider_trading https://www.law.cornell.edu/wex/misappropriation_theory_of_i...

arsome 3y ago
This is just news trading, you're just really fast because you're the headline.
labrador 3y ago
I love answers like this because it clears up confusion in few words and makes the answer obvious in retrospect
- abm53 3y ago
  It’s often a dangerous kind of answer. I once saw somebody say something to the effect that in every Hacker News thread, there is always a highly upvoted comment that sounds completely plausible, well argued, made by somebody who appears highly qualified to answer, and that is completely incorrect. I don’t think it’s always true, but it often is.
- SoylentOrange 3y ago
  Unfortunately in this case the answer as written is completely wrong. See the top reply. > If you do not have a fiduciary relationship with Boeing and you have no confidentiality obligations with respect to the information, you are not trading on inside information. Specifically this part. One of the first things you learn when doing mandatory insider trading training is you can easily run afoul of the law if you act on non-public info you overheard, or happened to see by accident, even if it has to do with some company with which you are not affiliated. A common example is you’re in a coffee shop and see an upcoming earnings report on someone else’s laptop screen, then trade based on that information.

tester756 3y ago

It's is just a meme

philwelch 3y ago

This is a good opportunity to point out that insider trading is a victimless crime. If you sell stock with insider knowledge, you sell it to someone who would have happily bought it at the same price or possibly a higher price from someone else anyway. The same is true if you buy stock with insider knowledge. The only net effect of insider trading is to make the market more efficient by pricing in otherwise inaccessible information.

kevinmchugh 3y ago
If I work for Apple and I'm on the special secret new Apple Glasses project, I reasonably know that when the product is announced the stock is going to go up. That information belongs to Apple, not me. Apple could sell more shares to capitalize on the announcement. By buying shares before the announcement, I'm capturing some of the gain that should be Apple's.
- HPsquared 3y ago
  If the company itself was to buy its own stock based on non-public information, wouldn't that also be insider trading? The corporate entity itself is, like, the ultimate insider.
- filoleg 3y ago
  That's why companies like Apple have very strongly enforced rules related to this for their employees, like blackout windows on trading AAPL shares and not allowing them trading AAPL shares at all. And there are even more restrictions for those working on certain teams and in certain areas (e.g., finance/accounting). Buying/selling right before the big announcement or earnings reports is straight up not allowed. I don't know the actual dates for Apple (as I only have friends working there, I haven't worked there myself, and I didn't quite care to ask for the exact length of trading blackout windows). But I know for a fact myself that at Google you get a trading blackout window that starts around 3-4 weeks before the quarterly earnings announcements and ends around a week or so after. And you are not allowed to trade GOOG options at all while an emlpoyee, not even outside of those trading blackout windows. There are additional blackout windows as well, but that's beside the point, and I don't remember them off the top of my head. And that's just for a run-off-the-mill software engineer working on an internal infra product that isn't some super-top-secret thing.

cedws 3y ago

I've been thinking about building a system that would enable me to quickly react to black swan events like this should they happen around me in daily life. The problem is that most of my funds are in savings accounts that take 1-2 business days to withdraw from, so I'd have to keep them in accounts that are faster to access. Also, this information that the passengers had in advance could have been worth millions in the right hands. If you had information like this, how could you quickly find parties interested in buying this information or giving you a share of potential gains?

clbrmbr 3y ago
Verification of time-sensitive rare events from strangers is hard. But I can see how that could really increase your potential winnings.

barbazoo 3y ago

Why would it be it’s public information at that point.

deleted 3y ago

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zilti 3y ago

I'm slightly disappointed that the question was only hypothetical.

charlieyu1 3y ago
In 2017 someone bought put options of Dortmund football team and bomb the team bus. I guess the circumstances are slightly different.

pavlov 3y ago

Is it insider trading if you sold Microsoft stock short because Windows gave you a BSOD? Clearly not. The question is only raised because airplane failures are much more rare than software failures.

mathiasgredal 3y ago
Well, if I found an unpatchable zero-click RCE exploit on an iPhone, then that would have a major effect on the stockprice when the news is announced. It definitely seems like it would be insider trading if i used that knowledge to do options trading.
- patmorgan23 3y ago
  Only if you were an employee of apple (or one of its vendors working on the iPhone). If you independently discovered it, any other member of the public could have discovered it (assuming they had the skills and time).
  - pavlov 3y ago
    This is basically how professional short sellers like Citron Research and Muddy Waters work. They spend months doing research and if it’s promising they first build their short positions, then publish the research. Often just being targeted by these famous short sellers will crash the stock. But it’s not insider trading because their research was independently sourced.

kazinator 3y ago

No, you're not a Boeing insider by sitting inside their plane; that's weapons-grade word semantic equivocation.

hnbear 3y ago

Matt Levine covered this well too: https://archive.is/Kd6Os https://archive.is/Kd6Os The answer being no, because as a consumer you have no duty of confidentiality.

SV_BubbleTime 3y ago
It’s a better question to see if it meets colloquial definitions of arbitrage. It’s an advantage only a few people have, and you paid something in order to be put in that position.
- hnbear 3y ago
  You paid to be in the plane. I doubt anyone paid specifically to be in a plane with the hope that a door would blow off to take advantage of information asymmetry in the aircraft manufacturer's stock (or the airline's stock).
intrasight 3y ago
What if in the fine print of your ticket purchase was an NDA clause?
- whycome 3y ago
  Now you’re gonna have terms like that on your next ticket. And you’ll get charged a fee for the privilege.
- jowea 3y ago
  IANAL and it depends by jurisdiction but I don't you can stick whatever you want in those sort of shrink-wrap contracts. And according to this site[1] there's at least one (Finland) where surprising terms specifically are not allowed. [1] https://www.dlapiperintelligence.com/goingglobal/intellectual-property/index.html?t=commercial-contract-considerations&s=enforceability-of-terms https://www.dlapiperintelligence.com/goingglobal/intellectua...
kristianp 3y ago
"if you are just a regular person and you go to McDonald’s and buy a burger and say “this burger tastes bad, I’m gonna short the stock,” that’s fine, that’s legitimate research. ... People are supposed to go around observing companies’ products and services, evaluating them, and incorporating those evaluations into their investment decisions. That’s how stock prices become efficient and how capital gets allocated to good uses rather than bad ones."

alexander2002 3y ago

Is it insider trading if i bought Tesla puts while inside the wrecked tsla ? Seems the intituive answer is no.

LASR 3y ago

Of course not. I could see the airplane lose a door in the sky and immediately short airline stocks. But so can anyone really. People watching all this have no control over the door actually falling off. Insiders have the ability to shift the course of the company. So the reason why we have this law is so that insiders don’t short their own stocks and then run the company into the ground, making guaranteed profits from that at the expense everyone else.

supportengineer 3y ago

Someone is going to write a trading bot that scans worldwide ADSB data, looking for sudden, unexplained altitude changes - Identify the airline and equipment type and short them both. Assuming this doesn't exist already.

SV_BubbleTime 3y ago
I’ve long thought that the airlines have systems that was sports leagues. That when team A is out of the running or team B makes it to championship that the price of tickets to or from are automatically adjusted m.
deleted 3y ago
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gnicholas 3y ago

I recall learning in law school that “if there is no tipper there can be no tippee”. In order for there to be a tipper, the person has to have an intent to provide a tip improperly. Imagine there’s a CEO talking in an obscure foreign language in his own backyard, to a colleague on the phone, he is not a tipper — even if someone who happens to speak that obscure language is walking by his fence at that moment. As a result, that person cannot be a “tippee” because there was no tipper in the first place. I’m not sure that not being a tippee means you’re completely in the clear, since you have material information. But it’s presumably not non-public information since hundreds of people know it, and thousands more are finding out by the minute.

Johnny555 3y ago
>Imagine there’s a CEO talking in an obscure foreign language in his own backyard, to a colleague on the phone, he is not a tipper Is that actually true? I could believe it if he were speaking in a cryptographic code, but even an obscure language has more than one speaker so he shouldn't be revealing corporate secrets where he can be overheard even if he's speaking a foreign language.
- s0rce 3y ago
  Apparently there are a few languages with only 2 speakers left, so I guess in that case its true.
- gnicholas 3y ago
  Technically he wouldn’t be a tipper (vis a vis the stranger on the other side of the fence) even if he were speaking English. To be a tipper one has to have intent to share the information inappropriately. I only included the language bit to make it clear he was taking some level of precaution, and had a reasonable expectation that he was not spreading the information around. Even carelessness does not make one a tipper vis a vis a stranger, IIRC. But it’s been a couple decades since law school, so I could be wrong, laws could have changed, etc.

clbrmbr 3y ago

Hmm. So a rouge Meta employee could put a barometric pressure monitor in Messenger or WhatsApp (that people use even without paid in-flight wifi) to detect depressurization and automatically short the airline and aircraft manufacturer.

loeg 3y ago
This would probably be violating the employee’s fiduciary duty to Meta.
- deleted 3y ago
  [deleted]
- MichaelBurge 3y ago
  But Meta the company could short the stock, and run a trading team using the information. It might be unwise because of bad PR, though.
  - loeg 3y ago
    Yes, exactly.
wheybags 3y ago
They wouldn't have to be rouge, they could be any colour really
s0rce 3y ago
Most phones got rid of the barometers.
- deleted 3y ago
  [deleted]
anonu 3y ago
Complicated. You could just monitor commercial flights that take off and return to the same spot shortly after

np_tedious 3y ago

HN of a stack exchange of a reddit (special shoutout to Money Stuff)

bdcravens 3y ago

I wonder if the same would be true of the media that learn of events before they are publicized.

bfung 3y ago

The actual article was from Reddit’s r/wallstreetbets , where any excuse to post meme trades goes. Go read for fun.

BMc2020 3y ago

Ctrl-F Casino Royale During the film, the terrorist financier Le Chiffre uses a Ugandan warlord's money to short-sell stock in Skyfleet, thus betting the money on the company's failure. The banker plans to bring about said failure by destroying the company's prototype airliner. After his original bomb-maker is killed by James Bond in Madagascar, another is hired to complete the job. The bomb-maker infiltrates Miami International Airport and steals a fuel tanker; attaching a keyring-sized bomb to the vehicle. As he attempts to blow up the prototype with the truck he is intercepted by 007 and a fight ensues on-board. Eventually the terrorist is forced from his vehicle and Bond narrowly prevents the truck from colliding with the plane. With his plan foiled, Le Chiffre is left with a major financial loss and is forced to set up a high-stakes poker tournament at Casino Royale in Montenegro.

jihadjihad 3y ago
> is forced to set up a high-stakes poker tournament at Casino Royale And take a long pull from that inhaler of his.
loceng 3y ago
Huh, so sabotage of a flight on a plane where it's very plausibly related to ongoing quality control is a viable method of generating profit without suspicion - so long as the mechanic who sabotaged door to low off isn't the same one making playing the stock?
- klyrs 3y ago
  I still don't think it counts as insider trading if an outsider sabotages the airplane and buys the puts. The sabotage itself is probably a dozen federal offenses (gasp, terrorism!) resulting in actual prison time; insider trading only gets a slap on the wrist.
  - loceng 3y ago
    Agreed, it wouldn't be insider trading - just fraud - with potential horrible unintended but predictable consequences; of which the person(s) buying the stock around that orchestrated event happens would be complicit in. There's probably far easier and more lucrative ways for clever criminals to execute on though.

alkonaut 3y ago

The interesting case of this question is mentioned in the comments to the question but not answered: what if you are the Boeing CEO, you have a ton of stock, and you are on the flight. Would it be insider information to tell your broker to sell evrything before the plane lands? It’s information about your company not known by the (wider) public but it’s also not information that it’s your job to protect or that you have any special access to? So if I understand correctly, it wouldn’t be insider trading in that case either?

kosievdmerwe 3y ago
If you're the CEO you're likely not allowed to trade this readily, no matter your reason. High-level execs tend to have to pre-declare sales and purchases months in advance.

deleted 3y ago

[deleted]

skynetv2 3y ago

This is clearly public information, it is not sensitive or restricted to the people with relationship with Boeing who are privy to this information.

dia80 3y ago

UK rules differ from the US there is a 3-point test for insider trading: 1. The information has to be specific - Yes - you should sell Boeing 2. Would a reasonable investor take this information into account when making a decision to trade - Yes - this seems quite clear 3. The information must be non public - IIRC disclosure to a large group of people - in this case the perhaps 200ish people on the plane knowing it had a problem would probably count as the information being public and thus this test is not met and you are free to trade - I think the bar is around 30 people I knew all those hours spent in compliance training would come in handy one day!

Dracophoenix 3y ago
On the third point, what if the plane was privately-owned or chartered?
- user_7832 3y ago
  That's when you start counting the radio call to the tower + whatever other pilots are there in the area to hit the golden 30.
  - quickthrower2 3y ago
    On the plane you can see the hole in the side. That is more of a signal to sell than a mayday alone. Maybe.
yieldcrv 3y ago
The fourth point, which most comments seem to be missing: would a court and appeals court take that same stance? here in the US, quoting statutes on this topic is not useful because we also don’t have a specific statute, we have a couple of general fraud statutes that the regulator has contorted itself to fit scenarios in
aneryx 3y ago
So if this was a smaller plane with only 20 people on it, it could qualify as inside trading in the UK?

m3kw9 3y ago

You don’t work for that company so it only means you for the news the fastest. Even if you worked for Boeing, it is public news as soon as it happened. You just happen to know it the fastest. Pure alpha

worble 3y ago

"Also can someone please answer fast as we are descending very quickly"

deleted 3y ago

[deleted]

jedberg 3y ago

Of course not, because you learned the information yourself as an outsider. Just like the hedge funds that pay for satellite images of all of the WalMart parking lots in the country and count the cars to estimate year over year sales. It's information they have that no one else does, but they didn't get it from an insider.

pcthrowaway 3y ago
The real reason Walmart allows car campers to sleep in their parking lots...
ehsankia 3y ago
Exactly. It's literally called "insider trading". There's nothing "insider" about an customer discovering something about the company's product while using it. The source of the information was not from "inside" the company.
- francisofascii 3y ago
  But the customer was literally “inside” the problematic plane. :)
  - Detrytus 3y ago
    But the plane is owned by the airline, not the manufacturer, so they are inside a Boeing, but they are not a Boeing insider.
permo-w 3y ago
this seems really obvious. you're not an insider if you're ... not an insider? how is this question even being considered
- mixdup 3y ago
  You can still be guilty of insider trading and not be an insider. If you get inside information from an insider and trade on it, even though you are not an insider or even if you didn't know the person you got it from was an insider, you are still in violation of the law in the US

charlieflowers 3y ago

If members of Congress can make millions trading on info they get from sitting on key committees, then trading based on your first hand experience certainly should be ok.

ponector 3y ago
But you know that law applies differently to poor people and to wealthy and powerful people? Whatever is ok for congressman could not be ok for you.
- quickthrower2 3y ago
  True but that goes beyond “is it illegal” to “will I be prosecuted for…”. Interestingly here I reckon even if illegal it is a bad look to go after a survivor of this.

amelius 3y ago

Is it insider trading if I bought Apple puts right after an auto update that crashes my phone?

ijhuygft776 3y ago

just dont tell anyone about it. /s

BurningFrog 3y ago

Trading on your phone outdoors is always safe!

choeger 3y ago

A hacker news post to a stack exchange question copied from reddit? At some point we might simply fuse these networks into one, don't we?

quickthrower2 3y ago
No! I like the firewalls between these networks thanks.
EasyMark 3y ago
no, think of it as a distributed network with manual switching (changing browser tabs, data cached/queued up in your brain)

zaat 3y ago

It can be more complicated, what if you are the pilot? > On August 15, 2006, it was revealed that Halutz sold off his investment portfolio three hours after two Israeli soldiers were captured by Hezbollah during the Zar'it-Shtula incident, leading to the war. While this action on the part of the chief of staff is technically legal and is only restricted (through blind trusteeship) from cabinet members, the State Comptroller Micha Lindenstrauss has called to expand it to the chief of staff and to other senior officials. Several Knesset members called for Halutz to offer his resignation and some members of the General Staff Forum commented that his resignation appeared inevitable https://en.wikipedia.org/wiki/Dan_Halutz#Investment_portfolio_scandal https://en.wikipedia.org/wiki/Dan_Halutz#Investment_portfoli...

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[deleted]

machomaster 3y ago

It's weird that nobody mentioned Hijack miniseries with Idris Elba yet.

vpribish 3y ago
because that's fiction?
- machomaster 3y ago
  Casino Royale was mentioned, so no.

IAmGraydon 3y ago

Of course it’s not insider trading. My question is how did this make it to the top of the HN front page? It reads like something you might see on WallStreetBets.

emi2k01 3y ago
You're right, that's the original source of the question https://www.reddit.com/r/wallstreetbets/comments/1935frs/is_it_insider_trading_if_i_bought_boeing_puts/ https://www.reddit.com/r/wallstreetbets/comments/1935frs/is_...
- quickthrower2 3y ago
  Top reply: crash was priced in before takeoff!
- IAmGraydon 3y ago
  Now that's pretty funny! Good find.

pricees 3y ago

I remember reading that a journalist dig into some gossip about a business found there to be credible evidence of malfeasance, sold the stock short, published the article, and was convicted of insider trading. I cannot find any of the details, but I recall reading this somewheres. Insider trading is whatever the govt said it is, which is why Martha Stewart went to jail, and walk street bankers just pay fines.

jbverschoor 3y ago

Im not sure how much more inside someone could be

mkl 3y ago
Inside the company Boeing, which is what counts.

vpribish 3y ago

no. this is a clickbait, bullshit, question that's been making the rounds of social media for weeks. You'd think that people here would not fall for this crap

motohagiography 3y ago

Already imagining a black mirror Nosedive app that recognizes products in your location and environment and presents offers to buy or sell the stock of the companies that produce them based on your experiences of the produts in the moment. The irony is of course is the adage, "Hate the service? Buy the stock" because it's so valuable people use it in spite of it sucking. Nobody ever thinks, 'this is terrible, how do I get long?' or, 'this is so awesome it can't possibly last, how to get short?', but that's how some traders make a living.

anonu 3y ago

The incident occurred at 526pm local time on the West Coast, so markets were closed. You wouldn't be able to trade. I'm a bit surprised that question is being asked. Fundamental investing is all about understanding things about a company that nobody else knows. This is an age old approach to investing. If you happen to stumble on that information, it doesn't make it insider trading. Where is crosses the line is if you're an insider and effectively breach your duty to the company or as a fiduciary. You're effectively stealing from the company. A passenger on an airline cannot steal information.

xarope 3y ago

Someone explain to me why is this any different to HFT bots trawling the web and reacting in microseconds to any adverse "news" about Boeing? ("news", since I'm not in that industry and don't know if they only react to official media, unofficial media - aka blogs etc, tweets, etc)

hakdbha 3y ago

[dead]

low_tech_punk 3y ago

Related to this, MIT professor Andrew Lo discussing stock price after Challenger rocket explosion. https://youtu.be/sMKQywwkIjQ?si=IXRB2iRZ0hPH3Sic&t=4633 https://youtu.be/sMKQywwkIjQ?si=IXRB2iRZ0hPH3Sic&t=4633

PlunderBunny 3y ago

From the headline, I thought this was going to be a link to an article on The Onion [1], or McSweeny's Internet Tendency [2]. [1]: https://www.theonion.com https://www.theonion.com [2]: https://www.mcsweeneys.net https://www.mcsweeneys.net

girafffe_i 3y ago

No, it's not material knowledge, it's just that you accessed public information first.

KETpXDDzR 3y ago

Recently, big airlines added the functionality to filter by airplane type. That comes in handy for such trading tricks. If you're employed with the airline, trade your insider informations instead of using it yourself. There are TOR websites to do so.