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Insider trading

UK //ˈɪnsaɪdə ˈtreɪdɪŋ//US //ˈɪnsaɪdɚ ˈtreɪdɪŋ//

Definition

The illegal buying or selling of stocks based on confidential information.

In simple words: Buying or selling stocks based on secret information.

Examples

  • The company was investigated for insider trading after significant stock price changes.
  • He was charged with insider trading for using confidential information about the merger.
  • Insider trading often leads to severe penalties and loss of reputation.
  • The SEC regulates insider trading to ensure fair market practices.
  • Many believe insider trading creates an unfair advantage for certain investors.

Usage notes

Typically used in legal or financial contexts. Avoid in casual conversation. Associated with unethical practices.

Grammar pattern

standalone noun phrase

Memory hint

Think of an 'insider' as someone with secrets that can make them rich.

Collocations

  • commit insider trading
  • prosecute insider trading
  • allegations of insider trading

Synonyms

  • market manipulation
  • stock fraud
  • securities fraud
  • financial misconduct

Common mistakes

  • Confusing insider trading with regular stock trading.
  • Assuming all trading based on tips is insider trading.
  • Not recognizing it as illegal in many jurisdictions.