2006-10-28 06:27:44 · 7 answers · asked by viswa 1 in Business & Finance ➔ Investing
It is when you have been told that for example such and such a company is in serious bank trouble and will be laying off a quarter of its staff. Then you have become privy to inside information - and if you then use this and sell your stocks in that company before they decline in value - you have done insider trading.
2006-10-28 06:30:09 · answer #1 · answered by radiancia 6 · 0⤊ 0⤋
Insider trading is when someone has information about a company that they use to either buy or sell stocks to make a profit. The information they use has not been made public yet, so other stockholders cannot take advantage of it. For example, let's say you worked for Apple computers and you found out that they were going to release a product that you thought would cause their stock to rise. If you shared that information with a friend and they bought stocks in Apple computers, that would be insider trading.
2006-10-28 13:33:57 · answer #2 · answered by bizou_bear 3 · 0⤊ 0⤋
When a person inside the company who knows things about the company before the general public or "regular shareholders" knows them, and uses this information to profit by trading (buying OR selling) the stock.
2006-10-28 13:47:09 · answer #3 · answered by Byron W 3 · 0⤊ 0⤋
The legal definition is that there has to be an attempt to make the information on an important action of a company public (usually faxing out press releases), before people inside the company or their outside contacts can buy or sell. So the CEO of a company has to wait till the newpaper reports that the company is laying off people or the product has a defect before the CEO can buy or sell.
2006-10-28 13:44:34 · answer #4 · answered by gregory_dittman 7 · 0⤊ 0⤋
When a person has information that the general public does not have about a company and either buys or sells thier stock for monitary gain (to either make money or keep from losing money ) that is insider trading.
2006-10-28 13:35:06 · answer #5 · answered by Bill A 1 · 0⤊ 0⤋
It means that you have information that you shouldn't have, and are offering it to people for their benefit. For example, if you worked for a company and knew that the stock was going to plummet, and you told a friend so they could pull their money out before a formal announcement was made.
2006-10-28 13:31:20 · answer #6 · answered by Anonymous · 0⤊ 0⤋
People, because of their connection with a company, who know something that will affect the price of the company's stock, that the general public doesn't know.
2006-10-28 13:31:07 · answer #7 · answered by Anonymous · 0⤊ 0⤋