Meaning of insider trading and how it is conducted.

Posted by epicresearchindore on February 23rd, 2018

Insider trading also known as insider dealing is trading of shares by any insider like manager or executive based on information which is not yet made public. It is usually prohibited by the law and it can be legal or illegal depending upon the piece of information which is used is made public or not. Some investors may involve in practicing legal insider trading as they believe insiders have better insight about companies performance and goals. Member of management buying shares of their company often conveys positive message in market, but illegal insider trading should never be practiced. Traders can take help from financial advisory services providers to know about useful trading strategies and precise levels to trade with.

Following are some ways by which insider trading is conducted:

1) Members of company

Employees who are working is any public traded company have access to information which are not easily available to public. They make use of this information and buy/sell shares based on it. By doing so they expect they will earn good once the information is made public.

2) Different professionals

Bankers, lawyers, brokers may have access to confidential information of their clients. They make misuse this privilege and buy/sell shares based on the information they have learned.

3) Government officials

Government officials can get access to different confidential information while execution of their duty. They may perform insider trading using this information.

4) Hackers and thieves

Clever people find number of ways to get access to company's confidential information. Once they get access they may make use of such information and trade on the basis of it.

 

An innocent investor or trader may perform insider trading accidentally. Following are some precautions which you can take to save yourself from doing so :

1) Rely on usage of reliable and authentic source of information while trading in market. If any person is providing you any kind of information then make sure that information is available at other sources as well.

2) Inform suitable authorized person if you come across any piece of information related to your portfolio which is not yet made public.

3) While working in a company if you are having access to its confidential information then do not use it for wrong purpose.

It can be concluded by saying that insider trading is considered to be illegal in most of the cases. So before you make use of any information while trading always make sure that information is easily available to public also. If found guilty, fine may be imposed on you or it can even lead to imprisonment. While trading in market traders can use mcx tips and other experts suggestions to earn expected returns and accomplish their trading goals. Discipline is one quality that every trade must posses for becoming a successful trader. Indisciplined trading practices are not going to help good from market on long term basis.


epicresearchindore

About the Author

epicresearchindore
Joined: June 3rd, 2016
Articles Posted: 72

CryptoKnight Capital - Earn Crypto on Auto-Pilot!
Start investing safely in crypto when you follow our automated cryptocurrency trading portfolios. Let us do the work and earn you money!
MXC | Bitcoin Trading Platform-Bitcoin_Litecoin Real-time Price Quotes | MXC Exchange
MXC Exchange is the world's leading digital asset platform. It provides real-time price quotations in multiple currencies such as BTC, LTC and ETH, and supports hundreds of digital assets trading and investment information. MXC Exchange is best choice
HOTBIT Crypto Exchange
Hotbit is one of the professional digital asset exchange platforms that provide trading services among major digital currencies like Bitcoin, Litecoin and Ethereum for users from all over the world.
Bilaxy
The World's Leading Crypto Asset Trading Platform
BitStarz Online Casino
BitStarz is an award-winning bitcoin casino offering more than 2,200 casino games including slot machines, blackjack, poker, roulette, baccarat, bingo and more!
Dualmine - Multiply your Bitcoin, Ethereum, Litecoin and Dogecoin
Start cloud mining and increase your crypto capital now! Unique product offering the mining of the most profitable cryptocurrencies in the cloud - BTC and ETH. You can mining one of them or both at the same time. Your hardware is already running and waiti