When an insider discloses a stock trade are they required to execute?
"No.  And furthermore, canceling based on insider information is not considered insider trading. SEC Interpretation from October of 2000: (a) Does the act of terminating a plan while aware of material nonpublic information result in liability under Section 10(b) and Rule 10b-5? No. Section 10(b) and Rule 10b-5 apply ""in connection with the purchase or sale of any security."" Thus, a purchase or sale of a security must be present for liability to attach. See Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723 (1975). [link mine] A 10b5-2 is a rule in the SEC's section in federal law that governs trading on ""material nonpublic information."" Fried (2002) even concluded that: The SEC's safe harbour permitting insiders to buy or sell shares pursuant to prearranged trading plans while in possession of material nonpublic information and to cancel the plans while aware of material nonpublic information enables insiders to profit from their access to such information.  The SEC could easily eliminate insider's advantages over public shareholders by not allowing insiders to cancel their plans after becoming aware of material nonpublic information." They are not required to fulfill the trade that they have intended to execute.  They are able to cancel or modify the trade at any point.  Example: This is how insiders are able to manipulate the price of shares through there buying and selling intentions.  A CEO would be able to disclose a buy order for a month from now, or whatever time period is required.  This would most likely increase the price of the stock as investors would see this as a good sign of company performance.  Up until the point when the buy order is scheduled to execute the CEO can then cancel the order and create a new sell order.  Since the stock is high in price, his new order is likely to make him money based on the manipulation from his trading intentions.   I am not an expert on the subject and only know as much as I do through personal research. Here is an interesting article about this kind of insider trading and manipulation:http://dealbook.nytimes.com/2012/12/10/the-fine-line-between-legal-and-illegal-insider-trading/?_r=0
Insiders are prevented from buying or selling shares except at certain periods right after information is disclosed publicly. But. People have bills to pay and kids to put through college and whatnot. So an insider can set up a plan where shares are sold on a specific schedule and they have no control over number of shares or timing. These plans (covered under rule 10b5-1) allow insiders to generate cash flow without immoderately benefiting from their inside information. Sales under these plans can mostly be ignored when trying to figure out the fortunes of a company from insider trades. "Yes, there are legal problems with what he did. To prevent fraud, the US government regulates who can give public investment advice and how they can do it. If you're getting paid to advise an individual, you have to pass certain examinations and maintain ongoing government certification. If you hold a position in a stock you're touting, you legally have to disclose it using particular language. And if you're a corporate insider or hold a significant position in a company, you're restricted on what you can say about the company and when you can say it. Mr. Jackson, aka 50 Cent, held a significant position in the company he tweeted about. My guess is the guys in the suits came to visit Mr. Cent, because if you go to the article the OP links to, at the bottom they mention Mr. Cent's tweet has been deleted and replaced with ""go talk to your investment advisor""." The role of the market maker is to make sure there is a bid and ask on a particular stock.  That's it.  The market maker ensures that there is a price at which you can buy and a price at which you can sell immediately, but these are not necessarily the best prices.  The majority of trades do not involve market makers and occur between two third parties. Whoever said a market order trades with the market maker is thinking of the way stock markets were years ago, not the way they are now. Market orders are supposed to execute immediately and at one time trading with the market makers was the method for executing immediately. If you issue a market order today, it executes with the best available limit order(s) on the other wide of the trade.  This may or may not involve a party that identifies as a market maker. "No.  The more legs you add onto your trade, the more commissions you will pay entering and exiting the trade and the more opportunity for slippage.  So lets head the other direction.   Can we make a simple, risk-free option trade, with as few legs as possible? The (not really) surprising answer is ""yes"", but there is no free lunch, as you will see.  According to financial theory any riskless position will earn the risk free rate, which right now is almost nothing, nada, 0%.   Let's test this out with a little example. In theory, a riskless position can be constructed from buying a stock, selling a call option, and buying a put option.  This combination should earn the risk free rate. Selling the call option means you get money now but agree to let someone else have the stock at an agreed contract price if the price goes up.  Buying the put option means you pay money now but can sell the stock to someone at a pre-agreed contract price if you want to do so, which would only be when the price declines below the contract price.  To start our risk free trade, buy Google stock, GOOG, at the Oct 3 Close:   495.52 x 100sh = $49,552 The example has 100 shares for compatibility with the options contracts which require 100 share blocks. we will sell a call and buy a put @ contract price of $500 for Jan 19,2013.   Therefore we will receive $50,000 for certain on Jan 19,2013, unless the options clearing system fails, because of say, global financial collapse, or war with Aztec spacecraft. According to google finance, if we had sold a call today at the close we would receive the bid, which is 89.00/share, or $8,900 total.  And if we had bought a put today at the close we would pay the ask, which is 91.90/share, or $9190 total. So, to receive $50,000 for certain on Jan 19,2013 we could pay $49,552 for the GOOG stock, minus $8,900 for the money we received selling the call option, plus a payment of $9190 for the put option we need to protect the value.  The total is $49,842.   If we pay $49,842 today, plus execute the option strategy shown, we would have $50,000 on Jan 19,2013.  This is a profit of $158, the options commissions are going to be around $20-$30, so in total the profit is around $120 after commissions.   On the other hand, ~$50,000 in a bank CD for 12 months at 1.1% will yield $550 in similarly risk-free interest.   Given that it is difficult to actually make these trades simultaneously, in practice, with the prices jumping all around, I would say if you really want a low risk option trade then a bank CD looks like the safer bet.  This isn't to say you can't find another combination of stock and contract price that does better than a bank CD -- but I doubt it will ever be better by very much and still difficult to monitor and align the trades in practice." Could it conceivably be that these executives had standing orders to systematically sell a certain amount of shares each month or quarter? Could we also extrapolate that this was part of their normal compensation package? Optics are still very bad, but the amount of shares sold and the monetary gain were so small as to be negligible in the grand scheme of things. Worth a thought. I can't speak for all brokerages but the one I use requires cash accounts to have cash available to purchase the stock in this situation. With the cash available you would be able to purchase the stock if the option was exercised.  Hope this helps On most proxy statements (all I have ever received) you have the ability to abstain from voting.  Just go down the list and check Abstain then return the form.  You will effectively be forfeiting your right to vote. EDIT: According to this, after January 1, 2010 abstaining and trashing the voting materials are the same thing.  Prior to January 1, 2010 your broker could vote however they wanted on your behalf if you chose not to vote yourself.  The one caveat is this seems to only apply to the NYSE (unless I am reading it wrong).  So not sure about stocks listed on the NASDAQ. Publicly traded companies perform dilution via an FPO (Follow-up Public Offer). It is a process similar to IPO, with announcements, prospectus, etc. You will know ahead of time when that happen. Stocks traded OTC are not required to file a lot of regulatory documents that publicly traded stocks are required to file, and may not disclose dilutions or additional issues. By buying OTC you agree to these terms. You will probably get a notice and a chance to vote on that in your proxy statement, but that happens when you already own the stock.