These are further observations on Insider trading.
- In depth post on Insider Trading
- I held a view earlier that Insider trading improves price discovery and infact compiled an article for Analyst magazine of ICFAI way back in 1996.
- Now I lean toward Prof . Gordon Haave's point of losing an edge to insiders.
- Insider trading is so rampant and considered as common place like corruption in Markets like India, many market players are not surprised about it.
- Average players should take care not to foray beyond well covered stocks ( Nifty Junior), where there may be risk of Insider trading and pump and dump schemes.
- I have seen traders taking pride on their inside info and connections to operators in a stock as their edge and source of folowership.
- Retail traders I discuss with cannot digest the futility of trying to gain inside info and the wisdom of concentrating on liquid and index stocks basing their views on market generated data.
- Rampant trading by promoters of small companies through fronts and benami names are not considered as a surprise in emerging markets like India.
- Broker-Promoter nexus before fund raising, creeping acquisitions,major corporate announcements,squeezes are well documented in India.
2 comments:
Nice post!
Insider trading is what made me turn my trading activity to index futures and to market microestructure. I don't depend on large moves to make money. I really don't care were the car is going - and what car is, who is the driver, etc - for I'm trading on its mechanics, it's engine, it's structure.
For example, my day target is 30% of the day's bar range. Achievable and reliable.
Regards from Brazil!
Newton Paulo Linchen
Dear Newton,
I really liked your objective of aiming for 30% of day's bar range.Beautiful way of approaching the market with a scientific reference frame.
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