Keep your ethical bs to yourself for a second and think about this. If you only did it once and could not get caught would you do it? If it was a trivial sum of money, ~$5k and not millions, would it matter? If you're just riding the wave with everyone else then who could get hurt by your actions?
I was out drinking with a friend a couple of weekends ago and he/she drunkenly passed along very non-public and very material information regarding an announcement that their company was making that week. It was readily apparent to me at the time that this announcement would definitely cause their stock price to spike. We were both pretty drunk, but I think my friend thought I was drunk enough to forget...my memory is better than they thought.
Turns out the information was spot on. The company's stock price soared and I watched from the sidelines. A couple hundred call options would have been nice. What would you have done?
Anyone else have non-incriminating insider information stories?
You are asking to keep the ethical bs out, and yet you are still worried about whether other people would get hurt or not??
But if you take ethics out and just consider it from a pure risk-reward perspective, sure why the hell not?
I'm sure it happens too. If you are like Rajaratnam and don't do it for like $50 million but much smaller amounts, it wouldn't be too hard to get away with it.
I wouldn't ever risk it. Just not worth it to make a few grand. And if you're doing it with like 50 million, then youre a retard cause someones going to figure some shit out.
It's pretty high risk low reward. Prison has a pretty high opportunity cost.
Take it from someone who has colored outside the lines a few times. Inside information is by no means a sure thing. You're taking just as big a risk (arguably bigger if you consider the potential legal penalties) as any other rube throwing darts at a board.
Let me explain: sure, you have this one case where shit worked out. That happens often enough and, no, the odds of you getting caught turning $5,000 into $10,000 are minuscule. So fire away. However, inside information is all about the source. If you're getting the information from an early-in-their-career (like you) drinking buddy, odds are the info won't even be close to 100% reliable.
This was endemic to the market in the early 90's, so much so that most of us just turned a deaf ear to inside tips - they turned out to be wrong, misleading, or overstated more often than they came close to the truth.
You can certainly trade on inside information - lots of people do it - but do it with the knowledge that if a low-level shlub like you has the information, it's probably already factored into the price of the stock.
i promise to keep my ethical bs to myself if you promise to let us know how the tip panned out.
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