Insider trading refers to trading in stocks/securities by persons who are possession of certain kind of qualified information which has a direct bearing on the stock/security price, by virtue of their association with the company.
It means the kind of information is not availble to the market participants at the point of time of trade.
inside trader obtains such information, because of association with company either 1) he holds a position of responsibility in the company 2) or he has contact/liason with somebody who holds a position of responsibility in the company.
