<story><title>Why Not Insider Trade on Every Company?</title><url>http://www.bloombergview.com/articles/2015-08-11/why-not-insider-trade-on-every-company-</url></story><parent_chain><item><author>nostromo</author><text>It&amp;#x27;s actually still possible to perform a specific type of legal insider trading.&lt;p&gt;Example: you are an executive at E Corp and the company will announce its acquisition in two months.  You had previously set up planned trades to sell x number of shares each month before then.  Because the acquisition is at a premium on the current price, you will make much less money if you go forward with your trades before the announcement.  So, what do you do?  You cancel the trades.&lt;p&gt;Was this insider trading according to the SEC?  Surprisingly, no!  Even though you&amp;#x27;re profiting from insider information, the SEC rules are such that for insider trading to occur, you actually need a trade.&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;en.wikipedia.org&amp;#x2F;wiki&amp;#x2F;SEC_Rule_10b5-1#A_possible_loophole:_canceling_plans&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;en.wikipedia.org&amp;#x2F;wiki&amp;#x2F;SEC_Rule_10b5-1#A_possible_loo...&lt;/a&gt;&lt;p&gt;Martha Stewart did exactly this before her company was acquired earlier this year:&lt;p&gt;&lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;i.imgur.com&amp;#x2F;ZikHCpP.jpg&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;i.imgur.com&amp;#x2F;ZikHCpP.jpg&lt;/a&gt;</text></item></parent_chain><comment><author>stcredzero</author><text>What was that about how most problems in Computer Science can be solved with an additional level of indirection? Maybe the same is true for Insider Trading? Instead of buying options on the stock of a company, use options on the stock of another company that owns options on the 1st company. Perhaps derivatives have gotten so complicated in recent years as a means of hiding insider trading? (Perhaps there are quants with Comp Sci degrees figuring out ways to make detection of insider trades an NP-Complete problem?)</text></comment>
<story><title>Why Not Insider Trade on Every Company?</title><url>http://www.bloombergview.com/articles/2015-08-11/why-not-insider-trade-on-every-company-</url></story><parent_chain><item><author>nostromo</author><text>It&amp;#x27;s actually still possible to perform a specific type of legal insider trading.&lt;p&gt;Example: you are an executive at E Corp and the company will announce its acquisition in two months.  You had previously set up planned trades to sell x number of shares each month before then.  Because the acquisition is at a premium on the current price, you will make much less money if you go forward with your trades before the announcement.  So, what do you do?  You cancel the trades.&lt;p&gt;Was this insider trading according to the SEC?  Surprisingly, no!  Even though you&amp;#x27;re profiting from insider information, the SEC rules are such that for insider trading to occur, you actually need a trade.&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;en.wikipedia.org&amp;#x2F;wiki&amp;#x2F;SEC_Rule_10b5-1#A_possible_loophole:_canceling_plans&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;en.wikipedia.org&amp;#x2F;wiki&amp;#x2F;SEC_Rule_10b5-1#A_possible_loo...&lt;/a&gt;&lt;p&gt;Martha Stewart did exactly this before her company was acquired earlier this year:&lt;p&gt;&lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;i.imgur.com&amp;#x2F;ZikHCpP.jpg&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;i.imgur.com&amp;#x2F;ZikHCpP.jpg&lt;/a&gt;</text></item></parent_chain><comment><author>dsjoerg</author><text>That&amp;#x27;s not insider trading!  That&amp;#x27;s insider cancelling!&lt;p&gt;&lt;i&gt;totally&lt;/i&gt; different</text></comment>