What is insider trading?

What is 'Insider Trading'. Insider trading is the buying or selling of a security by someone who has access to material nonpublic information about the security. Insider trading can be illegal or legal depending on when the insider makes the trade. It is illegal when the material information is still nonpublic. Next Up. Insider.

What is the difference between poop and insider trading?

Poop is a slang term used to describe inside information or people with insider, nonpublic information that can be used to their financial advantage. Insider trading is the buying or selling of a publicly traded company's stock by someone who has non-public, material information about that stock.

Why is insider trading unfair?

This is because it is seen as unfair to other investors who do not have access to the information, as the investor with insider information could potentially make larger profits than a typical investor could make. The rules governing insider trading are complex and vary significantly from country to country.

Is insider trading a securities fraud violation?

The SEC defines insider trading as when someone trades a security while they possess knowledge of material non-public information about that security or company. While the Securities Exchange Act is clear about when insider trading is considered a securities fraud violation, there are some cases where it can be legal.