On one hand, it's purely mechanical; it just works that way. On the other, it's hard to imagine doing it deliberately wouldn't be considered manipulation.
The purpose of buying call options is to to make a profit. It's hard to imagine that buying them and doing nothing other than buying them could be considered illegal. That's not manipulating the system any more than Buffet manipulates the system every time he buys stock (by also sending out the message that he thinks the stock is worth buying, just because he bought it without even needing to say anything about it).
The sheer magnitude of it is what makes it seem like a pump and dump, however. The mechanics are broadly similar: send a signal that should cause people to bid up securities you own, then drop the bottom out by selling when the price goes up enough.
I’m not saying it’s illegal per se, but financial misdeeds don’t tend to get punished in the US, unless the victims are wealthy enough. See, for instance, the global financial crisis of 2008 vs Bernie Madoff.
It would come down to intent. If the intent of buying a lot of options is, "I want a big position," or, "I want to hedge a big position," sure, that's probably fine. If the intent is, "I want to influence the market in some way," not so much.
That last "if" is the crux. Intent is a huge factor in what is and is not considered legal market behavior. For example, consider banging the close. Buying lots of futures at a certain time of day is not illegal in and of itself. But it's quite illegal if regulators show that your purpose in doing so was to influence the settlement price of some other asset in which you hold a position.
Insider trading drives prices closer to fair value. A CEO dumping shares before reporting a bad quarter saved money for unknowing purchasers buying the stock. If the CEO buys shares before reporting a huge new government contract, they get a better price for clueless sellers.
Now public companies could still restrict CEOs and other employees from profiting from insider knowledge. It could even be as simple as requiring employees to file disclosure filings before any stock transaction to level thevplayomg field.
I think he means that in technical analysis, they trade based on price action. Thus, insider trading gives you a peek into something that the fundamentals haven’t revealed yet (the price will change to reflect the secret news).
Good question.
On one hand, it's purely mechanical; it just works that way. On the other, it's hard to imagine doing it deliberately wouldn't be considered manipulation.