I tried researching (I’ve been watching Suits and I’m at the part when Stutter is accused of insider trading) and I still don’t understand what they mean by “making trades based on nonpublic information”. So please explain like I’m five what this really means.
In: Economics
Insider trading is trading in the stock market, based on information that is not public.
Say you work for Samsung QA, and get to know from an email from your boss that certain phone models are prone to randomly exploding.
Insider trading would be deciding to sell stocks (or short the stock) BEFORE that information becomes public (hoping that the stock goes down).
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