From my perspective as a stock and options trader, I’d much rather have insider trading made a legal activity. For one, I wouldn’t have to worry about getting blindsided by a bad quarterly earnings report – a negative report would be telegraphed weeks in advance by the stock-selling activity of those in-the-know. This activity could be seen in the declining stock price ahead of an earnings announcement. Likewise, unusual stock-buying activity or call option buying would alert me that good news is pending -- maybe an unannounced takeover or major new contract. Instead of hurting my trading profits, seeing the trading activity by the insiders would reduce my risk and increase my opportunity.
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