With respect to insider trading, what is considered “material information”?
"Some history: In the US, this is very tightly controlled and regulated. Although stock market securities insider trading is a relatively new crime around the world (20-30 year old), the United States  is exceptional for offering the longest sentences for it, although it is still far more lucrative than and carries lower sentences than something like petty larceny. The perception of illegal insider trading has changed in the US over the years, although it is based on much older fraud statutes the regulators and the courts have only really developed modern case law against insider trading in the past 20-30 years. The US relies on its vast network of registered broker-dealers to detect and report abnormal trading activity and the regulator (SEC) can quickly obtain emergency court orders from rent-a-judges (Administrative Law Judges) to freeze trader's assets to prevent them from withdrawing, or quickly enacting sanctions. So this reality helps deter trading on material inside information. So for someone that needs to get an information advantage on the market, it is [simply] necessary for them to rationalize how this information could be inferred from public sources.  Similarly there is a thin line between non-public information and public information, the ""lab experiment"" example would be material insider information, but the fact that there will be litigation over a company's key patents may be ""public"" as soon as the lawyer submits the complaint to the court system. It is also worth noting that there are A LOT of financial products trading in the capital markets, and illegal insider trading laws only applies to trading of shares of a company. So if a major holder in gold is about to liquidate all their holdings, being short gold futures is not subject to civil and criminal sanctions. Hope this helps. The above examples should help you understand what kind of information is material inside information and what kind is not, and how it is relevant to trading decisions." Material Information means that any information that can reasonable affect the share price of the company [upward or downward] as looked by the investors. The idea is to provide a level playing field to all investors. Hence it forces people having material information not to trade when they have this information that is not yet disclosed. Yes it happens all the time and laws are quite stringent. There is monitoring of share activity by regulators ... hence most of the times the companies come out with their own guidelines and top & senior management is prohibited from trading in their own company’s shares for pretty much round the year except few windows the company decides is safe. Now it may not be possible to monitor every small material info, but any large spike of stocks after certain announcements is investigated by regulators to verify any undue gains. For ex a person who never trades suddenly buys large qty of shares and it goes up and he sells again ... etc
If you are in a position to have information that will impact the shares of a stock or index fund and you use that information for either personal gain or to mitigate the losses that you would have felt then it is insider trading.  Even if in the end your quiet period passes with little or no movement of the stocks in question.  It is the attempt to benefit from or the appearance of the attempt to benefit from inside information that creates the crime.  This is the reason for the quiet periods to attempt to shield the majority of the companies employees from the appearance of impropriety, as well as any actual improprieties. With an index you are running a double edged sword because anything that is likely to cause APPLE to drop 10% is likely to give a bump to Motorola, Google, and its competitors.  So you could end up in jail for Insider trading and lose your shirt on a poor decision to short a Tech  ETF on knowledge that will cause Apple to take a hit.  It is certainly going to be harder to find the trade but the SEC is good at looking around for activity that is inconsistent with normal trading patterns of individuals in a position to have knowledge with the type of market impact you are talking about. "This information is clearly ""material"" (large impact) and ""non-public"" according to the statement of the problem.  Also, decisions like United States v. Carpenter make it clear that you do not need to be a member of the company to do illegal insider trading on its stock. Importantly though, stackexchange is not a place for legal advice and this answer should not be construed as such.  Legal/compliance at Company A would be a good place to start asking questions." More shares mean less volatility because it takes a larger number of trades, a larger number of shares per trade, or a combination of both to raise or lower the stock price. Institutional investors (mutual funds, pensions, hedge funds, other investment firms, etc) are the sorts of organizations with the large amounts of money needed to move a stock price one way or the other.  But the more floating shares there are in a company, the harder it is for one or two firms to move a stock price.  A company with fewer floating shares wouldn't require as many trades (or as many shares per trade) to see wider swings in price. When it comes to stock price, insider trading isn't the same as manipulation.  In the (surprisingly few) cases of insider trading that are prosecuted, it tends to be an individual (or small group) with early access to information that the broader market doesn't have being able to buy or sell ahead of the broader market.  Their individual sales are seldom if ever enough to noticeably move a stock price.  They're locking in profit or limiting a loss.  Manipulation might (but doesn't always) precede insider trading, if misinformation (or truth) is released for the purpose of creating a situation that can be profited from via a trade or trades. I'm answering this from a slightly different angle, but there are people (individuals) who will do this for you. I know private Forex traders who are 'employed' to manage Forex trading accounts for wealthy individuals. The trader takes a percentage of the wins but is also responsible for a percentage of the loss (if there is a loss in a particular month). However the fact that the trader is able to prove that they have a consistent enough trading history to be trusted with the large accounts generally means that losses are rare (one would hope!). Obviously they have contracts in place (and the terms of the contract are crucial to the responsibility of losses) etc. but I don't know what the legalities are of offering or using this kind of service. I just wanted to mention it, while perhaps not being the best option for you personally, it does exist and matches your requirements.  You would just have to be extremely careful to choose someone respectable and responsible, as it would be much easier to get ripped off while looking for a respected individual to trade your account than it would be while looking for a respected firm (I would imagine). It is a shame that really insightful article is wrapped up in a paranoid wrapper.  It is all accurate, IMO and is basically the worldview I use when I trade markets.  Except I don't get all fixated on gold.  I see gold as just one tool out of many for exploiting the exploiters. Since you seem determined to consider this, I'd like to break down for you why I believe it is an incredibly risky proposition: 1) In general, picking individual stocks is risky. Individual stocks are by their nature not diversified assets, and a single company-wide calamity (a la Volkswagen emissions, etc.) can create huge distress to your investments. The way to mitigate this risk is of course to diversify (invest in other types of assets, such as other stocks, index funds, bonds, etc.). However, you must accept that this first step does have risks.  2) Picking stocks on the basis of financial information (called 'fundamental analysis') requires a very large amount of research and time dedication. It is one of the two main schools of thought in equity investing (as opposed to 'technical analysis', which pulls information directly from stock markets, such as price volatility). This is something that professional investors do for a living - and that means that they have an edge you do not have, unless you dedicate similar resources to this task. That information imbalance between you and professional traders creates additional risk where you make determinations 'against the grain'.  3) Any specific piece of public information (and this is public information, regardless of how esoteric it is) may be considered to be already 'factored into' public stock prices. I am a believer in market efficiency first and foremost. That means I believe that anything publically known related to a corporation ['OPEC just lowered their oil production! Exxon will be able to increase their prices!'] has already been considered by the professional traders currently buying and selling in the market. For your 'new' information to be valuable, it would need to have the ability to forecast earnings in a way not already considered by others. 4) I doubt you will be able to find the true nature of the commercial impact of a particular event, simply by knowing ship locations. So what if you know Alcoa is shipping Aluminium to Cuba - is this one of 5 shipments already known to the public? Is this replacement supplies that are covering a loss due to damaged goods previously sent? Is the boat only 1/3 full? Where this information gets valuable, is when it gets to the level of corporate espionage. Yes, if you had ship manifests showing tons of aluminum being sold, and if this was a massive 'secret' shipment about to be announced at the next shareholders' meeting, you could (illegally) profit from that information. 5) The more massive the company, the less important any single transaction is. That means the super freighters you may see transporting raw commodities could have dozens of such ships out at any given time, not to mention news of new mine openings and closures, price changes, volume reports, etc. etc. So the most valuable information would be smaller companies, where a single shipment might cover a month of revenue - but such a small company is (a) less likely to be public [meaning you couldn't buy shares in the company and profit off of the information]; and (b) less likely to be found by you in the giant sea of ship information. In summary, while you may have found some information that provides insight into a company's operations, you have not shown that this information is significant and also unknown to the market. Not to mention the risks associated with picking individual stocks in the first place. In this case, it is my opinion that you are taking on additional risk not adequately compensated by additional reward. "I'm surprised at the tone of the answers to this question! Trading with insider information is corruption and encourages fraud. As in many areas, there's an ethical line where behavior the gap between ""ok"" and ""illegal"" or unethical is thin. The classic local government insider information example is when the local councilman finds out that a highway exit is being constructed in an area that consists mostly of farmland. Knowing this, he buys out the farmers at what they think is a premium, and turns around for 10x profit a few months later. In that context, do you think that the councilman acting on that insider information is committing a crime or ethical lapse? Most people say yes.  Even in this case, the line is thin. If the same councilman has his finger on the pulse of growth patterns in the area, and realizes that the terrain makes a certain area a prime candiate for a highway and exit, buying up land would not be criminal -- but it would be risky as it creates a perception that he is abusing his position." "These people are pretty off. Insider trading cases, outside of a tender offer context, require some sort of a breach of duty. It's not simply ""non-public material information"". You have to trade securities in interstate, based on or while in possession of the material non-public information, and in doing so is a breach of duty owed to the company or to the information source.  Now simply saying ""personal info"" about an executive does not tell me much about its materiality. So assuming it passes the materiality test, and assuming you yourself aren't a corporate insider, then the only thing left to discuss is whether or not it is misappropriation. To be misappropriation you need to be breaching some duty owed to your information source. Now this isn't just principal-agent duty, this can extend to friends and family if there is a pattern of keeping confidences. So unless you're this guys brother or doctor there really isn't a strong claim against you."