One thing that I think about from time to time is that the notion of “material nonpublic information” is outdated and incoherent. In the olden days, you could have some simple intuitions about what constituted insider trading. Some news would obviously be material to a company’s stock price: If you knew that the company was about to announce a merger, or earnings that were much higher than analysts’ expectations, then you could expect that the stock would trade up a lot. So you could buy the stock before the announcement, wait a few days, and then sell the stock at a big profit right after the announcement.

Insider trading — trading on this sort of material nonpublic information — is generally illegal, and regulators policed it in intuitive ways: They look at stocks that move a lot on earnings or merger announcements and see if there’s any suspicious trading by anyone who might have inside information.

QOSHE - Super Users Had Inflation Questions - Matt Levine
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Super Users Had Inflation Questions

9 0
10.04.2024

One thing that I think about from time to time is that the notion of “material nonpublic information” is outdated and incoherent. In the olden days, you could have some simple intuitions about what constituted insider trading.........

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