A-Z Popular Blog Top Search »
Business Ethics
Technology Ethics

What is Insider Trading?

 , updated on
Insider trading is the trading of a company's stock or other securities such as bonds based on material information that is not public knowledge. For example, an employee who knows that a firm is about to be acquired who purchases the stock before a press release causes the stock to go up.
Markets that fail to prevent insider trading may be viewed as unfair by investors. This makes it more difficult for firms to raise money and can damage an economy. In most jurisdictions, insider trading is tightly regulated including the requirement that officers, directors and major beneficial owners publicly report their trades. In many cases, an insider trade is considered fraudulent as a violation of fiduciary duty.

Third Parties

Insider trading laws may extend to people who aren't employed by a company such as friends and family who receive material information from insiders that isn't public knowledge.


Misappropriation is a similar concept to insider trading that is also regulated in many jurisdictions. It occurs when any stock is traded based on material non-public information you receive from your employer. For example, an employee of a law firm who personally profits from confidential information about a merger or acquisition related to a client.
Overview: Insider Trading
The trading of a company's stock or other securities such as bonds based on material information that is not public knowledge.
Related Concepts
Next: Information Advantage

Business Ethics

This is the complete list of articles we have written about business ethics.
Agency Cost
Conflict Of Interest
Crony Capitalism
Do No Harm
Dual Agency
Environmental Issues
Ethical Climate
Ethical Issues
Fee Splitting
Fiduciary Duty
Professional Ethics
Reputational Risk
Right To Know
Self Dealing
Technology Ethics
More ...
If you enjoyed this page, please consider bookmarking Simplicable.

Conflict Of Interest

A few examples of conflict of interest.

Chinese Wall

An overview of Chinese walls as a compliance tool.

Regulatory Capture

An overview of regulatory capture.

Self Dealing

An overview of self-dealing with examples.

Perverse Incentives

An overview of perverse incentives.


The definition of duty with examples.

Crony Capitalism

The definition of crony capitalism with examples.


An overview of cronyism with an illustrative example.

Dual Agency

The definition of dual agency with examples.

Professional Ethics

The definition of professional ethics with examples.

Business Risks

A list of common business risks.

Risk Treatment

The five things that can be done about risk.

Risk Mitigation

A list of techniques for reducing risk.

Positive Risk

The potential that you'll achieve too much of a good thing.

Dread Risk

Any risk that people have a strong aversion too.

Risk vs Opportunity

The surprising similarities between risk and opportunity.

Risk Management vs Contingency Planning

The difference between risk management and contingency planning.


The common types of uncertainty in decision making and strategy.

Inventory Risk

The common types of inventory risk.

Business Risk Management

An overview of common business risk management techniques.
The most popular articles on Simplicable in the past day.

New Articles

Recent posts or updates on Simplicable.
Site Map