Insider Trading?

#1
I am a newbie to the stock market and just got recruited by a stock broker firm. I wish to learn by trading for my own account so that i gain practical knowledge and to avoid making wrong recommendations but my fellow dealer said i can't open my own personal account cause its apparently 'INSIDER TRADING' :confused:. From what i have (I am not trying to be a smart a** here) learnt Insider Trading is acting on 'MATERIAL NON PUBLIC INFORMATION' before it becomes 'PUBLIC' and i wish to know how is staring into price movements and reaching into your own conclusion is acting on Material Non Public Information. Or are the stock recommendations we get on our terminal considered material?, but these are again arrived by analysts performing their own analysis right?.

This restriction is kind of annoying me :annoyed:. I request someone to clarify this and let me know if I have got anything wrong.
 

Mr.G

Well-Known Member
#2
You have more materials available to you than average trader, eg number of orders, market depth. You place orders for very big clients. You can piggy back on their trades when they move the market. You can profit from knowing exactly what others are doing, so to prevent that you are not allowed to trade. Become an analyst if you want to grade for yourself and not dealer.
 

anup

Well-Known Member
#4
Many companies have rules and regulations and before joining you will be signing on the non disclosure agreement. Its better you follow the company rules. Learn the game of trading/investing. Once you feel comfortable then you can quit the job and become trader. All the best
 

Mr.G

Well-Known Member
#5
Most new people don't get hni or di accounts, they get smaller accounts. Senior dealers get big accounts, but regulations for both are same and penalty is severe.
 

bunny

Well-Known Member
#6
Many companies have rules and regulations and before joining you will be signing on the non disclosure agreement. Its better you follow the company rules. Learn the game of trading/investing. Once you feel comfortable then you can quit the job and become trader. All the best
I hope you get large clients for this.
 
#7
You have more materials available to you than average trader, eg number of orders, market depth. You place orders for very big clients. You can piggy back on their trades when they move the market. You can profit from knowing exactly what others are doing, so to prevent that you are not allowed to trade. Become an analyst if you want to grade for yourself and not dealer.
Correct me if I am wrong. Apart from large order info the other information is available to clients on their online trading platform also right?. Also suppose If I am a portfolio manager or asset manager for a mutual fund does this position also prohibit me from opening an account for my self or my parents/relatives?

And thank you everyone for replying :). Appreciate it. :thumb:
 

bunny

Well-Known Member
#8
Correct me if I am wrong. Apart from large order info the other information is available to clients on their online trading platform also right?.
Take it with a pinch of salt. If that were so true, why would we have poorly performing funds? Every fund would have performed better. The key word is "piggy-backing on large orders" because you know when exactly they are going to release large orders into the market. But ofcourse, you have to have a good institutional client for that. There are fools even amongst the big money.
 

Mr.G

Well-Known Member
#9
Correct me if I am wrong. Apart from large order info the other information is available to clients on their online trading platform also right?. Also suppose If I am a portfolio manager or asset manager for a mutual fund does this position also prohibit me from opening an account for my self or my parents/relatives?

And thank you everyone for replying :). Appreciate it. :thumb:
Bunny answered one hlf.Il answer the other half. As a portfolio manager you can buy shares in your own fund house, you or yourdirect relatives can't trade on any other account. This encourages better performance. But sadly as fund managers are "salaried" sheep, they don't care what their fund does and usually invest in FDs. I am a private portfolio manager, in old times portfolio managers had a large amount of self money in fund as goodwill for investors, this is not the case with the idiots managing mutual funds nowadays.
 
#10
Take it with a pinch of salt. If that were so true, why would we have poorly performing funds? Every fund would have performed better. The key word is "piggy-backing on large orders" because you know when exactly they are going to release large orders into the market. But ofcourse, you have to have a good institutional client for that. There are fools even amongst the big money.
Bunny answered one hlf.Il answer the other half. As a portfolio manager you can buy shares in your own fund house, you or yourdirect relatives can't trade on any other account. This encourages better performance. But sadly as fund managers are "salaried" sheep, they don't care what their fund does and usually invest in FDs. I am a private portfolio manager, in old times portfolio managers had a large amount of self money in fund as goodwill for investors, this is not the case with the idiots managing mutual funds nowadays.
Hmm... alright guys i get it... so if I have to trade for my own account, i can't be a dealer. Are there any other criteria that prohibits a person from trading for his own account or is this it?
 

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