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What is Insider Trading?
The term Insider trading directly indicates that trading or dealing of a security can be done through the person who can access to nonpublic information and material that is important for the security. So, an insider must posses any one characteristic of many from the following-
- He must have the right to access information related to valuable non-public information.
- He must have the ownership stock of more than 10% equity of a firm.
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What are the methods of Insider Trading?
There are two types of insider trading-
- Legal trading –
When the material information is made public.
- Illegal Trading –
When no information is known by the public and an insider take decision of dealing.
Many times it is said that all dealings are illegal, but these are both legal and illegal and that depend on the way used by an insider.
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What are the terms you need to know when you take attempt of your assignment related to Insider trading?
A lot of information is required to get an exact solution for insider trading. These are as follows-
- SEC.
- Insider.
- Open market transaction.
- Insider information.
- Whistle blower.
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