Modern Insider Trading - Food for Thought

Ok so I am just an intern, and I have no intention of trading based on inside information. However, I've thought about how easy it could be to do it really.... while also leaving no bread crumbs of evidence.

Contemporary society is becoming more decentralized by the day. The fruit of this innovation is that anonymity is easily granted to those who are smart. Now, if you have ever been on the dark web, it is easy to see that there are ways around leaving evidence to convict.

For those not familiar, the dark web is the internet that you don't see, where drug dealers, pornographic sites, and even assassins for hire lurk. What is to say insider trading doesn't as well. Maybe it does??? People maintain their anonymity through the use of a virtual private network and TOR, which is an onion browser, before accessing the deep web. TOR has layers of intermediaries that essentially make ur information and history inaccessible and untraceable as a user.

So, by this point you are on the web and completely untraceable. There may as well be a WSO (deep web edition). On this site, in theory there could be a forum where people could exchange information from bank to bank and even people no longer in financial services to learn of upcoming market events before they happen (democratization of what politicians have lol).

Remember "greed is good"

What does the WSO community think of this, and I do not care to get a bunch of MS and "delete this now" I am having an open discussion and hope to trigger a little discussion worth discussing

 
Most Helpful
Dave_Portnoy:
What does the WSO community think of this

I think it's incredibly stupid to be asking a question like this. What are you aiming to get out of this?

Like, yeah, I can see that what you're saying is possible... does that answer your question? Are you going to live your life in any different way now that you've had some WSO stranger validate that you might be onto something?

Get off the dark web and commit to live an honest life dude. If you surround yourself with those thoughts/those kinds of people, you will become those kinds of people. It will catch up to you. Contrary to the movies, greed is not good, and you will lose far more than your easily-earned money if you get caught up in crap like that.

 
Dave_Portnoy:
Ya its unethical, but I happen to think its a pretty good idea

You can choose to live your life however you want man, I'm just saying... If you play with matches, you'll get burned. Maybe I'm misunderstanding everything. If I am, I'm really sorry; I just don't think this is the place to post crap like this. Especially given that this is a website that many teenagers go on when they're learning about finance in high school. This isn't 4chan, but your post was very much a /b/ topic.

If you're thinking about doing crap like this, it'd be a good idea to take a step back after your internship, unplug, and deeply consider your future.

 

This is honestly such a terrible idea and highly unethical/illegal. One point is that seems that this scenario would also require those in industry to all participate in the dark web. I don’t know how a network could be formed, but it’d be extremely easy to sniff this out.

Many players from Galleon group to an IB analyst (https://www.bloomberg.com/news/articles/2019-08-12/junior-analyst-bill-…) have been caught because they presumably thought it was easy to trade with insider information, too, and I’m sure they’re paying the price.

 

Insider trading is an iq test. Those that are caught are fools. Not hard to have a non family member/mule to trade your inside idea and then funnel the money back legitmately. Guys get caught because they: 1. Have a family member or close friend trade the inside info (stupid) 2. Have their mule trade the info as the ONLY POSITION. You need to layer that merger announcement trade with other crappy positions. 3. Correspond with their mule using texts and traceable communication sources. Pass that inside info in person like every other responsible inside trader. 4. Have the winning position cash wired to their personal bank account (not that hard for the sec to put two and two together there).

All of this goes out the window if you are a large institutional player, old money billionaire, connected with Goldman Sachs, jp morgan or working for the senior levels of the government. They get an insider trading exception and can be lazy with their activities.

 

This is the worst advice you've ever received. Let's do a hypothetical and say you're an analyst working on a merger between Walmart and Target. You reach out to your cousin via the dark web to let him know it's happening (don't know how that shit works, but let's assume the communication isn't discoverable). He places a sizable order for long positions in both stocks along w/ a bunch of other random shit. A month later, the merger is announced, both shares pop and he has a bunch of cash wired to his account.

Before figuring out how you get the money from his account to your pocket w/out setting off a bunch of red flags, do you really think that the SEC is stupid enough to say "Huh, the cousin of an analyst at bank x who worked on the deal had a cousin, who hasn't had much activity in his account before, load up on the target and acquirer a month before the merger, then cashed out of both positions post-announcement. There must be nothing going on, though, because he also bought some Tesla, AAL, and JBHT"

Pretty sure that the previous poster was joking, you failed the IQ test, and would wind up in federal pound me in the ass prison if you tried to follow the advice.

I come from down in the valley, where mister when you're young, they bring you up to do like your daddy done
 

Not true. Put aside that it's unethical and illegal, there's really only one way to make money insider trading, which is buying short dated and way out-of-the-money options. (With a typical takeover premium in the 30-40% range, and ST capital gains taxes at 40%, buying the common stock of a takeover target is going to yield you a ~30% gain. If you've got seven figures of principal to play with, and you look good in stripes, I guess that's okay, but you probably don't).

The regulators know this, and they look back at that option trading activity after any public company is acquired. The number of people making those low probability bets is tiny, and the number of people who do it more than once, always successfully, is almost zero. If you're the non-zero you're going to get caught, you're going to pay back every dollar you made (before taxes...), get buried in legal fees, go to prison, and never work in the securities industry again. 

 

are you? the whole point is they cant access the dark web or locate their server's w/ the inherent anonymity of an onion browser. Doesnt matter if the feds can think about it. in fact, apparently its been going on for years after some research

path less traveled
 

lmfao this is so accurate people use a vpn and think they can use kali linux

 

Trust me, you have no idea what the SEC is capable of. Don't ruin your life ofr such a stupid thing.

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Will update my computer soon and leave Incognito so I will disappear forever. How did I achieve Neanderthal by trolling? Some people are after me so need to close account for safety.
 

The posters above me seem to focus on the anonymity/don't get caught part. That's stupid.

The real question is: why the fuck would you setup a dark WSO to trade insider info? The whole point of inside info is that only a very limited number of people have access to it, so why would you post it on a website accessible to anyone with two hands and half a brain?

The whole thing wouldn't work, because the optimal strategy for every user of the website would be to provide erroneous info while taking advantage of the correct info posted by other users, effectively leading all users in the end to post erroneous info.

 

I think most prospects who post on this site are dingi, but propsect, you've got some chops. Let me know if you need any help to secure an IB offer.

You've got brains!

https://media2.giphy.com/media/hkXPsko6vDreU/giphy.gif" alt="brain" />

Will update my computer soon and leave Incognito so I will disappear forever. How did I achieve Neanderthal by trolling? Some people are after me so need to close account for safety.
 

tails just makes everything go through tor im p sure

 
ITNAmatter

Ok so I am just an intern, and I have no intention of trading based on inside information. However, I've thought about how easy it could be to do it really.... while also leaving no bread crumbs of evidence.

Contemporary society is becoming more decentralized by the day. The fruit of this innovation is that anonymity is easily granted to those who are smart. Now, if you have ever been on the dark web, it is easy to see that there are ways around leaving evidence to convict.

For those not familiar, the dark web is the internet that you don't see, where drug dealers, pornographic sites, and even assassins for hire lurk. What is to say insider trading doesn't as well. Maybe it does??? People maintain their anonymity through the use of a virtual private network and TOR, which is an onion browser, before accessing the deep web. TOR has layers of intermediaries that essentially make ur information and history inaccessible and untraceable as a user.

So, by this point you are on the web and completely untraceable. There may as well be a WSO (deep web edition). On this site, in theory there could be a forum where people could exchange information from bank to bank and even people no longer in financial services to learn of upcoming market events before they happen (democratization of what politicians have lol).

What does the WSO community think of this, and I do not care to get a bunch of MS and "delete this now" I am having an open discussion and hope to trigger a little discussion worth discussing

path less traveled
 

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