Financial Definition of INSIDE INFORMATION

inside information

What It Is

Insider information refers to confidential information about a company that has not been publicly disclosed.

How It Works

Given their position, managers and executives within a company are privy to information about a company's operations that is not available to the investing public. The news and details of an upcoming merger or special dividend that have not yet been announced are two examples of insider information. Once information has been made public by the company, it is no longer considered "insider" information.

Why It Matters

Individuals with access to insider information have an unfair advantage in the market. Using this information to base a trade is an illegal practice known as insider trading.

It is also illegal for a person with insider information to pass it to a third party so that they may use the information to profit.

Law Dictionary

inside information

noun in·side information

Legal Definition of inside information

  1. :  information not known to the public that one has obtained by virtue of being an insider —called also insider information


Financial Definition of INSIDE INFORMATION

inside information

What It Is

Insider information refers to confidential information about a company that has not been publicly disclosed.

How It Works

Given their position, managers and executives within a company are privy to information about a company's operations that is not available to the investing public. The news and details of an upcoming merger or special dividend that have not yet been announced are two examples of insider information. Once information has been made public by the company, it is no longer considered "insider" information.

Why It Matters

Individuals with access to insider information have an unfair advantage in the market. Using this information to base a trade is an illegal practice known as insider trading.

It is also illegal for a person with insider information to pass it to a third party so that they may use the information to profit.


Seen and Heard

What made you want to look up inside information? Please tell us where you read or heard it (including the quote, if possible).

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!