[protocolture]

If they provided the information, "Hey I am bob in the pentagon and we are doing war soon", it wouldnt be insider trading.

But all they are doing is updating a financial instrument that suggests an increased likelihood, and getting massive bank for not providing the information that would make everyone else bet the same way.

[gruez]

>But all they are doing is updating a financial instrument that suggests an increased likelihood, and getting massive bank for not providing the information that would make everyone else bet the same way.

That's the incorrect way of thinking about this, at least according to how US insider trading laws work. If a hedge fund has reason to believe oil prices will spike due to some secret info (eg. they paid some intern to camp out at US airbases and spot outgoing flights), and then they made massive bank on that trade, that's not insider trading. It's not a crime to hoard material nonpublic information and trade on it (ie. "updating a financial instrument ... and getting massive bank for not providing the information that would make everyone else bet the same way"). Now, if they paid off some guy inside the base, that might be breaking a bunch of laws around national security, but still not insider trading.

[mlazos]

That’s 100% insider trading. If you use material non-public (including confidential) information to perform the trade it’s illegal. Paying someone to provide confidential info is still insider trading. Paying someone to observe planes (public information) is not insider trading. Researching using publicly available information (even though you don’t share your research) is not insider trading. The key point is the channel from which you receive the information.