> Others are willing to snap up equity in private competitors of a company to check out their orderbook to predict the reality of the market before it can be reflected by the market.
How is that not considered insider trading, in the light of what happened to the Capital One fraud researchers? Both are using information that's not available to the whole market.
The rules around this stuff just seem very arbitrary.
That's because they are and it has probably caused more harm than good by leading to the creation of these strategies.
Technicaly it isn't insider trading as they aren't getting data from the company. They are guessing it from a private company that is exempt from such guidance.
The Capital One researchers were also not getting any information from Chipotle. There were getting some information about Chipotle (specifically, that Capital One customers were spending a lot of money there). This information was not from inside Chipotle, but was also not available to the whole market.
Unless you can explain otherwise, it's exactly analogous to the situation described above.
That clears it up, thank you. So what they did automatically counts as insider trading because they misappropriated the information from their employer.
How is that not considered insider trading, in the light of what happened to the Capital One fraud researchers? Both are using information that's not available to the whole market.
The rules around this stuff just seem very arbitrary.