Insider Trading Follow That Lead

In some countries, insiders are required to promptly report their trades to the relevant authorities. These reported trades allow evaluation of how much abnormal return, if any, insiders generate. More important, it can be assessed whether it is worthwhile to emulate the insider's behavior. A c...

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Bibliographic Details
Published inJournal of Investing Vol. 9; no. 3; pp. 15 - 18
Main Authors Beckers, Stan E, Gathmann, Ulrich
Format Journal Article Trade Publication Article
LanguageEnglish
Published London Pageant Media 01.10.2000
Subjects
Abnormal returns
Insider trading
Market prices
Market segments
Profits
Rates of return
Sales
Statistical analysis
Stock exchanges
Studies
United Kingdom > UK
United States > US
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Summary:In some countries, insiders are required to promptly report their trades to the relevant authorities. These reported trades allow evaluation of how much abnormal return, if any, insiders generate. More important, it can be assessed whether it is worthwhile to emulate the insider's behavior. A case study for UK market shows that insider trades reveal information that is not yet reflected in market prices and that - at least in some market segments - copycats can profit from following the insiders' leads.
ISSN:1068-0896
2168-8613
DOI:10.3905/joi.2000.319377