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Is it insider trading if I bought Boeing puts while inside the wrecked airplane?

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Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?

#171

Post by atkailash »

arthurcolle wrote: post #151
Retric wrote: post #129

Earlier quoted context omitted.

That’s not quite correct, it depends on the nature of the disclosure. Someone receiving information from an insider needs be independent of personal, financial, and quid pro quo relationships. So a random person that happens to sit next to a CEO on an airplane can trade on whatever they hear. The CEO’s mistress sitting on the other side of them can’t.

> So a random person that happens to sit next to a CEO on an airplane can trade on whatever they hear. I am under the impression that this would also be illegal, because trading on the basis of MNPI is itself illegal, irrespective of insider/outsider status.

Agreed. It absolutely could be if it’s technically non-public information. That’s the entire point of the regulations. Just because you don’t work for the company doesn’t make it not insider trading if you act off information the company didn’t disclose.

Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?

#172

Post by pricees »

I remember reading that a journalist dig into some gossip about a business found there to be credible evidence of malfeasance, sold the stock short, published the article, and was convicted of insider trading. I cannot find any of the details, but I recall reading this somewheres. Insider trading is whatever the govt said it is, which is why Martha Stewart went to jail, and walk street bankers just pay fines.

Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?

#173

Post by emi2k01 »

IAmGraydon wrote: post #168

Of course it’s not insider trading. My question is how did this make it to the top of the HN front page? It reads like something you might see on WallStreetBets.

You're right, that's the original source of the question

https://www.reddit.com/r/wallstreetbets/comments/1935frs/is_...

Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?

#175

Post by quickthrower2 »

user_7832 wrote: post #137
Dracophoenix wrote: post #116

Earlier quoted context omitted.

On the third point, what if the plane was privately-owned or chartered?

That's when you start counting the radio call to the tower + whatever other pilots are there in the area to hit the golden 30.

On the plane you can see the hole in the side. That is more of a signal to sell than a mayday alone. Maybe.

Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?

#176

Post by labrador »

SoylentOrange wrote: post #166
labrador wrote: post #15

Earlier quoted context omitted.

I love answers like this because it clears up confusion in few words and makes the answer obvious in retrospect

Unfortunately in this case the answer as written is completely wrong. See the top reply. > If you do not have a fiduciary relationship with Boeing and you have no confidentiality obligations with respect to the information, you are not trading on inside information. Specifically this part. One of the first things you learn when doing mandatory insider trading training is you can easily run afoul of the law if you act…

The top reply currently for me is colinmorelli who says:

> in this particular case is no, it's not insider trading

You seem to be saying it could be, but that wouldn't mean the answer was "completely wrong" (your words)

Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?

#177

Post by quickthrower2 »

emi2k01 wrote: post #173
IAmGraydon wrote: post #168

Of course it’s not insider trading. My question is how did this make it to the top of the HN front page? It reads like something you might see on WallStreetBets.

You're right, that's the original source of the question https://www.reddit.com/r/wallstreetbets/comments/1935frs/is_...

Top reply: crash was priced in before takeoff!

Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?

#178

Post by philwelch »

kevinmchugh wrote: post #29
philwelch wrote: post #17

This is a good opportunity to point out that insider trading is a victimless crime. If you sell stock with insider knowledge, you sell it to someone who would have happily bought it at the same price or possibly a higher price from someone else anyway. The same is true if you buy stock with insider knowledge. The only net effect of insider trading is to make the market more efficient by pricing in otherwise inaccessi…

If I work for Apple and I'm on the special secret new Apple Glasses project, I reasonably know that when the product is announced the stock is going to go up. That information belongs to Apple, not me. Apple could sell more shares to capitalize on the announcement. By buying shares before the announcement, I'm capturing some of the gain that should be Apple's.

An employer should be (and AFAIK is) free to contractually obligate you not to front-run their own trading strategies. There’s no need for a federal criminal statute that, as far as I can tell, isn’t even primarily motivated by this use case.

Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?

#179

Post by francisofascii »

ehsankia wrote: post #156
jedberg wrote: post #122

Of course not, because you learned the information yourself as an outsider. Just like the hedge funds that pay for satellite images of all of the WalMart parking lots in the country and count the cars to estimate year over year sales. It's information they have that no one else does, but they didn't get it from an insider.

Exactly. It's literally called "insider trading". There's nothing "insider" about an customer discovering something about the company's product while using it. The source of the information was not from "inside" the company.

But the customer was literally “inside” the problematic plane. :)

Re: Is it insider trading if I bought Boeing puts while inside the wrecked airplane?

#180

Post by quickthrower2 »

choeger wrote: post #139

A hacker news post to a stack exchange question copied from reddit? At some point we might simply fuse these networks into one, don't we?

No! I like the firewalls between these networks thanks.
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