Insider Trading

In your dealings with the stock world, you will often come across the term 'insider trading'.

In simple words, the meaning of insider trading is 'the trading of shares based on knowledge not available to the rest of the world.Insider trading has 2 connotations.

Corporate personnel of a company buying and selling stock in their own company when corporate insiders trade in their own securities, they must report their trades to the exchange Illegal insider trading refers to buying or selling a security after receiving 'tips' of confidential securities information.

Thus it is considered as a breach of confidence while in possession of non-public information about the company.

Examples of insider trading· Corporate officers, directors, and employees who traded the corporation's securities after learning of significant, confidential corporate developments; · Employees of law, banking, brokerage and printing firms who were given such information to provide services to the corporation whose securities they traded; ·

Government employees who learned of such information because of their employment by the government; and · Other persons who misappropriated, and took advantage of, confidential information from their employers.