insider trading


Definition of insider trading 

: the illegal use of information available only to insiders in order to make a profit in financial trading

Examples of insider trading in a Sentence

Recent Examples on the Web

Collins was arrested by the FBI in early August, alongside his son and the father of his son’s fiancée on insider trading charges. Tara Golshan, Vox, "The 4 Republican scandals that could tip the 2018 midterms, explained," 5 Nov. 2018 Acting on a judge's order, Egyptian police detained the sons of former president Hosni Mubarak on Saturday along with three others in connection with insider trading charges for which the five are on trial, security officials said. Hamza Hendawi, Fox News, "Egypt court returns ex-president Mubarak's 2 sons to prison," 15 Sep. 2018 In the past month, two House Republicans were indicted by federal prosecutors: Chris Collins of New York on insider trading charges and Duncan Hunter of California for using campaign funds for personal expenses like vacations and family dinners. Reid J. Epstein, WSJ, "GOP’s Tough Task in House Races: Reach Beyond Trump’s Base," 2 Sep. 2018 Congressman Chris Collins, the 68-year-old Republican representative for New York's 27th district, was indicted on Wednesday on charges of insider trading. Caroline Hallemann, Town & Country, "Republican Congressman Chris Collins Was Just Arrested for Insider Trading," 8 Aug. 2018 Kendricks has started the last two games in his place but is facing possible suspension from the NFL for insider trading and Carroll said Monday the team had not heard yet if that may happen this week. Bob Condotta, The Seattle Times, "Injury updates from Pete Carroll’s Monday press conference: Justin Britt should be back but Seahawks uncertain on Mychal Kendricks," 24 Sep. 2018 Saturday’s surreal disregard for propriety won’t dent Mickelson’s popularity — not after his tone-deaf comments about taxes and an investigation into insider trading. Marcus Hayes,, "Phil Mickelson should be gone but officials turn a blind eye at the U.S. Open | Marcus Hayes," 16 June 2018 Another executive was indicted for insider trading. Michael E. Kanell, ajc, "Nine months after breach, Equifax names IBM-er new tech chief," 14 June 2018 President Trump is considering a pardon of lifestyle maven Martha Stewart, who was investigated for insider trading and convicted of conspiracy, obstruction, and making false statements to investigators years ago. Kristen Bellstrom, Fortune, "Samantha Bee Boycott, Martha Stewart Pardon, and Board Diversity Excuses: Broadsheet for June 1," 1 June 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'insider trading.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of insider trading

1966, in the meaning defined above

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Statistics for insider trading

Last Updated

9 Dec 2018

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Time Traveler for insider trading

The first known use of insider trading was in 1966

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More Definitions for insider trading

insider trading


Financial Definition of insider trading

What It Is

Insider trading refers to the trading of securities by corporate insiders such as managers or executives.

How It Works

Insider trading can be legal or illegal depending on if the information used to base the trade is public.

Individuals who engage in illegal insider trading attempt to benefit from trades based on information about a company not yet made public. For example, an executive of Company XYZ who purchases shares of the company based on a pending merger announcement is engaging in illegal insider trading.

However, once Company XYZ has announced the merger publicly, insiders may legally trade the shares based on the information.

Insider transactions must be reported to the Securities and Exchange Commission (SEC) via Form 4.

Why It Matters

Some investors follow legal insider trading because they believe insiders have a better insight to the financial health of a company.

For example, a CEO buying shares of his company conveys confidence in the future of the business.

Meanwhile, illegal insider trading can lead to fine and even imprisonment for the guilty party.

Source: Investing Answers

insider trading


English Language Learners Definition of insider trading

finance : the illegal activity of buying and selling a company's stocks while using secret information from a person who works for the company

insider trading


Legal Definition of insider trading 

: the illegal use of especially material inside information for profit in financial trading — see also tippee

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