Insider Trading & Market Manipulation
I’m Meta Matt, Director of Education and welcome to PB University LITE! This is a 50 Class Trading 101 Series geared towards both new and veteran traders alike! We go over everything from Trading Psychology, Technical Analysis, and Options Trading to Commodity Trading, Forex, and more!! This 50 Class series is not designed be taken in order, it is instead designed for traders to browse and pick which classes interest them. I will include the list of classes at the bottom of this page.
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Imagine a CEO knowing about a revolutionary product launch before anyone else. If they use this secret knowledge to buy a ton of their company's stock before the big reveal, that's insider trading. Why? Because it gives them an unfair advantage over regular investors.
Who are Insiders?
- CEOs, CFOs, and high-ranking officers
- Board members
- Employees "in the know" about sensitive company info
Regular folks like auditors or independent contractors typically aren't insiders.
Why are there rules against it?
It keeps the market fair. Everyone should have access to the same information!
Examples of Illegal Insider Trading
- A CEO buying a ton of stock before a secret product launch.
- A board member learning about stellar earnings and tipping off a cousin to buy shares.
Not all Insider Trading is Illegal
- Executives often receive stock options as part of their compensation. Selling these can be legal insider trading.
- Insiders can set up pre-planned trading arrangements to avoid suspicion.
- They can still buy and sell company stock, but with regulations and reporting requirements.
How to Find Insider Trades (Legally!)
- Check the SEC EDGAR database (we'll show you how in our Premium Course!).
Why Should We Care?
By tracking insider trades, we can potentially gauge an executive's confidence in their company.
- Heavy buying might suggest optimism, while selling could raise concerns (but not always!).
Market Manipulation: Don't Get Tricked!
This is when someone tries to artificially inflate or deflate a stock price. Think:
- Spreading fake news about a company.
- Fake trades to create excitement (pump and dump schemes).
Consequences for Market Manipulation
- Fines
- Jail time
- Loss of licenses
- Trading bans
- Reputational damage
The SEC Tracks Market Manipulation
They use sophisticated tools to catch those trying to game the system.
The Takeaway
Insider trading and market manipulation are serious offenses. While some might get away with it for a while, the risks are high. There are plenty of legitimate ways to make money in the market.
Keep it honest, folks!
Ready to Learn More?
We have over 100 FREE trading classes in our Discord server! Plus, our Premium Trading 101 Course and Charting Masterclass will take your skills to the next level.
PB University LITE Class List
1) Trading Terminology
2) Stock Market Indices
3) Common, Preferred, and Penny Stocks
4) Diversification of Assets
5) Fundamental Analysis Made Easy
6) Technical Analysis Made Easy
7) Risk Management In The Market
8) Portfolio Management
9) How To Follow Market News
10) Trading Psychology
11) Options Explained
12) The Greeks In Options Trading
13) How To Short Sell Options
14) Covered CALLS
15) Spread Trading
16) Online Brokers for Options Trading
17) Implied Volatility Calculators & Tools
18) Protective PUTS
19) Iron Condors
20) Straddles
21) Reading Level 2
22) Taxes
23) Trading Psychology Techniques
24) The Art Of Trading
25) Becoming A Jedi In The Stock Market
26) Futures Trading Explained
27) Commodity Trading 101
28) Regulatory Environments
29) How To Become A Millionaire
30) $100K In 100 Days
31) Wash Sale Rule
32) Behavioral Finance Part 1
33) Behavioral Finance Part 2
34) 5 Charting Indicators
35) Fair Value Gap
36) Insider Trading and Market Manipulation
37) Stock Chart Types
38) Moving Averages 101
39) Base vs Precious Metals
40) Electricity Trading 101
41) Trading Brokers 101
42) 5 Trading Strategies
43) 85% Trading Rule
44) Are Win Rates A Scam?
45) Futures Trading 101
46) ATR Indicator Strategy With The Greeks
47) MACD Indicator 101
48) Bollinger Bands Indicator 101
49) Wedges, Triangles, Flags and Pennants
50) RSI Divergence 101
