I hope not for them, because there clearly was insider news at play, here.
While litecoin was rising in previous months and its coinbase addition has been rumored, technical analysis two days ago shown compression and it was not expected to have any big move before tomorrow. Then, out of nowhere, ltc spiked, yesterday. 3 hours later, it was announced that litecoin was being added on coinbase.
Btw, I'm only in trading since cryptos and don't know classic markets, I would love someone to explain to me why using insider news is a crime.
The thing is, it only seems fair to me to be able to exploit insider news. Employees from a company are not affected by stock price change, at least not in a good way ; because when stocks go the wrong way, they'll certainly feel it by being asked more for less in their work. So it seems only fair that someone working in a company could benefit from knowing what is going on there : they would have a part of the pie, for once.
> I would love someone to explain to me why using insider news is a crime.
Because a market isn't fair if everyone doesn't have the same information available to them. Trading on insider information is literally stealing from those who don't have it. Imagine the CEO of a company knowing he's about to announce bad news and shorting his own stock ahead of the announcement to make millions from it, then buying it all up cheap at the bottom before announcing some large new government contract causing the price to rebound and making more millions again... all that money he's making, he's stealing from the general public by knowing what's going to happen ahead of time and using it to have an unfair advantage. Insider trading is like knowing the future, that's not a fair market.
That's funny because fairness was exactly what I had in mind to _allow_ insider trading, but using the point of view of fairness between investors and workers, rather than fairness between investors.
What would you think about allowing insider trading, but only once during career at company and only if you're not an executive? Or maybe just allowing it for a moderate amount of money?
I think no, it's theft whether you do it once or many times; you are stealing money from investors who cannot make a decision fairly because they don't have the "private" information you do. Insider trading is theft.
Ok, I see. Well, I agree with you there. But I have an other problem here : it's theft as well when people who keep buying and selling property keep profiting on people who actually keep companies running, who keep losing.
Trump, Lepen, what is called populism (I hate that word) feed on that. People feel that what they produce is being stolen. I, for one, don't want to think that finance is a problem. I think it's going too far, though, and that History is taking its revenge (or that it's on a downtrend?).
I require your help here to stop the hate : can you think of something that allows to be fair to both those who own property and those who create its value?
EDIT : or, to get more conceptual : you're fair to everyone, or you're fair to no one. Fairness is not a thing that applies to only a few, it's the exact opposite, by definition.
> it's theft as well when people who keep buying and selling property keep profiting on people who actually keep companies running, who keep losing.
I still don't understand what your complaint actually is? How are people who buy and sell stock being unfair to those who work at the company? The company got it's fair deal when it IPO'd and sold shares in exchange for money to operate. That investors later trade that stock back and forth between themselves doesn't affect the company who already got paid. If an investor makes money off a stock going up or down, it has no affect at all on the employees of the company so how exactly do you figure they're being treated unfairly?
Complaint is a strong word, I'm not an employee myself, I'm just trying to think about what is fair :)
> That investors later trade that stock back and forth between themselves doesn't affect the company who already got paid.
This is where we don't agree. I've seen plenty of times companies that made profit being moved to other countries where work is cheaper, or companies that were doing not so well asking salary cuts, then not giving salary back when things were doing better, and distributing bonus instead. Now that I'm in trading, I know why : this is a mean to produce "good news" and make stock rise. There is unfairness to employees, there, and people are getting more and more angry against finance because of that, this will end badly.
This is why I think allowing them to trade insider news - maybe with a moderate amount of money maximum - could defuse potential conflict. We could say to employees : "yes, stock value is a prime to us. But look, you can make good with it doing your own easy profits". It doesn't have to be about millions. Most employees would be very happy with an extra $500 here and there.
The message sent by making insider trading a crime could be heard that way : we're making money with your work that we don't really care about because we won't own stock from your company a year from now, we're deteriorating your work environment, and we'll punish you if you try to join the party.
Here's an other idea : insider trading could be allowed only for buying on good news. That way, there won't be people owning stock losing big money without warning. Investors won't have a chance to buy stock, but this is a miss opportunity, not harm, and they'll have plenty other opportunities elsewhere, or they can even jump in during rise and still make profit, just smaller than usual. It could even be a good thing : I love to trade small amount during big unpredicted spikes, because their pullback is big as well for a few minutes, and I often make my day just on those (when there's no news and no TA reason, moves get crazy).
It would harm shorters, but since those ones are wishing harm to the company, it still seems fair.
> It would harm shorters, but since those ones are wishing harm to the company, it still seems fair.
No, it isn't fair; this notion that shorters are somehow bad guys is bigotry. Shorters are just as important as those who go long in keeping prices accurate, they are not bad in any way and thinking it's "fair" to fuck them is a symptom you don't understand the market. Shorters don't wish harm on companies, rather they see companies are irrationally overvalued or see the company is doing something to risky or behaving badly and expect the stock price to fall. Don't be a bigot against trading one directly over the other, they're both the same.
And no, no insider trading at all, it's always stealing; you can't come up with a way to justify stealing. It's not ok to steal from investors to make up for being treated unfairly by your company.
> The message sent by making insider trading a crime could be heard that way : we're making money with your work that we don't really care about because we won't own stock from your company a year from now, we're deteriorating your work environment, and we'll punish you if you try to join the party.
I really don't think you understand the purpose of markets. If you did you wouldn't be having thoughts like this.
Well, if you refuse to try to understand other points of view, that's your choice. Beware, though : in coming decade, you may find that the whole world "doesn't understand" and acts accordingly. Happy trading.
The whole world is going to do what's it's always done, remain a mess of disagreement and be dominated by the rich and serve the interests of the rich.
I don't see why rich people are in this discussion. Certainly, should there be a collapse of classic finance, they would move away and just be as rich. This is hardly relevant anyway, because it's not rich people who drive classic finance, it's banks.
And banks are major actors because ... they have all the money of the world at their disposal. Should people be angry at banks and move their money from them (let's see... what recent financial innovation could allow people to withdraw their money from banks?), banks would be powerless. By the way, your overconfidence is typical of end of 3rd wave.
And then, they would be asked to work longer hours and accept salary cuts to make market confident again :) Not sure it would work in that direction, I don't think most people would intentionally deteriorate the company they work for.
Yeah, you're right. Obviously, most employees may not have the financial resources to do something big enough to be scary, but this may add up : if a company is public, it probably has a huge employee base. Employee may even not realize they are doing harm.
What would you think about allowing insider trading only on good news, that is, only buy on insider news? The only effect it would have would be miss opportunity for potential longers, but it would leave no one bag holding.
While litecoin was rising in previous months and its coinbase addition has been rumored, technical analysis two days ago shown compression and it was not expected to have any big move before tomorrow. Then, out of nowhere, ltc spiked, yesterday. 3 hours later, it was announced that litecoin was being added on coinbase.