Insider trading is illegal buying/selling of stocks with access to non-public info; happens frequently in stock market.

Understanding insider trading:

Insider trading affects average investors beyond high-profile cases like Martha Stewart; creates an unfair advantage.

Examples of insider trading:

Insiders trading on non-public info can significantly influence stock prices; disadvantage retail investors w/o access.

Impact on stock prices

Insider trading is illegal and unethical; form of cheating that creates unfair advantage for those with privileged info.

Ethical concerns:

SEC is responsible for enforcing insider trading regulations; difficult to catch insiders who often hide their actions.


Insider trading can distort the market and lead to loss of investor confidence; has ripple effect on economy.

Effects on the economy:

Legal trading based on public info; insider trading involves using non-public info.

Insider trading vs. legal trading:

Insider traders can face fines, imprisonment, and reputational damage; companies may also suffer consequences.

Consequences of insider trading:

Prevention of insider trading through policies that restrict access to non-public info and monitor trading activities.

Prevention of insider trading:

Detection of insider trading through monitoring activities, analyzing unusual patterns, and conducting investigations.

Detection of insider trading:

Insider trading impacts investment decisions; investors should conduct thorough research and invest ethically.

Impact on investment decisions:

Understand risks of insider trading; take steps to prevent and detect to ensure fair and transparent stock market.