High frequency of insider trading

追加: 2026-05-25

[00:00:00]Most companies, you could in fact sabotage the company after having sold short on the stock or bought options for the stock to fall and profit from that stock trade and you could make millions that way and almost nobody ever has.

[00:00:12]That's a remarkable fact about the stock market. We looked at 9/11 and many other famous cases of sabotage or things going wrong and we did not find people doing that. Even though you could make a lot of money on the stock market. It's really hard to find people who are able to do a large harmful action like that and team up with somebody who has enough money to profit from it.

[00:00:29]>> That's apparently just been a hard thing to find in the world and I'm surprised by that actually. I might have thought organized crime was more organized than that. They could figure this out, but apparently they can't. But there's also a pretty big surveillance met apparatus, right? That tracks all these trades and does catch people. It's actually it's hard to get away with insider trading.

[00:00:48]Not true. On average when a company has an announcement, the stock price moves, right? And on average half of that movement happens before the announcement. Half of that is due to correlations with other announcements, but half is insider trading. So, roughly quarter of all price movements are caused by insider trading and the number of insider trading prosecutions is vastly less than that. So, insider trading is just rampant and most of it is not caught, but the world isn't falling apart there. So, that says maybe insider trading isn't doing that much harm because here we are in a world where that's the status quo.