Although I am a new chum at investing I know the general mechanics of insider trading but… Is it possible to advise me of a way I can deduce if there is any insider trading on any particular company’s shares?

If see quite often small numbers of shares traded in any particular company. Say up to 20 shares. Surely the charges negate any possibility of profit on these trades. Can you explain why so many of these small trades take place?

I enjoy your reports.

A: Thanks for the question.

The very small trades you refer to (1, 2, 10, even 20 shares) are most likely due to algorithmic or program trading, where computers sell or buy baskets of stocks – often the whole index of 200 stocks at the one time. This is not insider trading.

Insider trading is very hard to detect at the time. Most often visible after the event. A potential example could be where a company makes a positive announcement, but in the days leading up to the announcement, the share price rose strongly.


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