2007-10-17 06:15:18 · 8 answers · asked by jrodbendi 3 in Business & Finance ➔ Investing
No, a lot of time "insiders" sell because of "stock options" they hold.
i.e. You have 1,000 shares of stock a selling for $50.00 per share, and you have 1,000 shares of stock options at $25.00 per share.
You sell the 1,000 shares at $50.00 = $50,000 you exercise your stock options at $25.000 = $25,000.
You pocketed $25,000 and have the same number of shares.
2007-10-17 06:19:57 · answer #1 · answered by Squat1 5 · 1⤊ 0⤋
No, it's the reasoning and timing of selling the shares. So basically, if you work at Company X and know that the company is not going to get its latest product approved, which will mean financial ruin, and you sell all your shares, that's insider trading.
If your company is selling a product to the government, and you know that there is going to be a billion-dollar sale, so you tell all of your friends/family to buy shares, that's insider trading.
If you work at a company and have a majority of your retirement plan in company shares, so you sell those shares to diversify, that is not insider trading. Also, if you just sell a bunch of shares because it's underperforming, that's not insider trading, either.
Hope that helps somewhat.
2007-10-17 13:21:44 · answer #2 · answered by jedimorgana 3 · 0⤊ 0⤋
No, Not always.. There are a million reasons any one insider sells stock. But if there are a lot of insiders selling at the same time (and thats Not the norm) it should be a reason for concern. Without using inside info, they may see a slow down industry wide or a downtrend in the sector before its apparent to the street.
Insider buying is a better gauge, there's really only one reason anyone buys,They think its going higher. (insiders or not) They use their own personal money to buy just like you and me. Again, it's better if a lot of them are doing it together
2007-10-17 19:24:17 · answer #3 · answered by ijokey2000 2 · 0⤊ 0⤋
If alot of insiders sell at the same time, maybe, but if they sell because of bad news, that's illegal. Look at their selling patterns. Many want to cash out, and to avoid insider trading, will set a fixed schedule and sell regardless of stock price or conditions. They like making money, too.
2007-10-17 13:22:46 · answer #4 · answered by Kyle B 4 · 0⤊ 0⤋
No, sometimes they might just want the money. But if lots of insiders are selling, it's worth paying extra attention.
2007-10-17 13:18:06 · answer #5 · answered by Judy 7 · 1⤊ 0⤋
No, sometimes they have options with dates need to sell certain shares.
2007-10-17 13:17:57 · answer #6 · answered by JoJo 3 · 1⤊ 0⤋
Best answer is to study the stocks yourself, look at the history and read peoples opinions, but at the end of the day do what you feel is best.
2007-10-17 13:17:11 · answer #7 · answered by Amir 2 · 1⤊ 1⤋
Yes.
2007-10-17 22:32:37 · answer #8 · answered by Anonymous · 0⤊ 3⤋