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Comment by jedberg | Hacker News Reader

> A lot of people, including the author of this piece, misunderstand the uses of a Bloomberg Terminal.

The author says: "[The terminal] is basically an exclusive club of approximately 325,000 people whose employers think they are worth at least $25,000 per year above their base salary."

So I don't think they missed the point.

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I think the idea that a bloomberg terminal is status symbol is not accurate. All it means is that I can save more than $25K in my trades per year by having it, which is a very small hurdle.

I absolutely agree. I had a terminal for most of my career and while it's an amazing piece of software (Reuters offer doesn't come close despite them often having more extensive news and data) and it's super convenient for contacting brokers and banks, I never felt people without it were left out. Especially nowadays, it's not uncommon for brokers to only give traders Bloomberg and Analysts other software to save cost. Doesn't impede their status. Quite the opposite, we always used to say that we'd happily give away terminal access for $25k extra a year. The reason that never happened is because having Bloomberg Access is in the companies' interests, not just the employees' personal interest.

Either way:

All of this makes me think the real value for many of a Bloomberg terminal is level 0 access to the insider trading club.

(Yes, I'm a cynical person. No, I'm not saying everyone who has a Bloomberg terminal is doing insider trading.)

Can you explain an example insider trading situation involving Bloomberg terminals?

I do not think that Bloomberg terminals are any more useful for insider trading, in the strict sense, than any other communication device, and probably less so because they are more likely to be monitored by one's employer. However, there is one exception: Bloomberg News publishes a lot of scoops about public companies. That is its raison d'être. To move markets. Those Bloomberg scoops are released to terminal subscribers 15-20 minutes before the news hits the rest of the market. So it's a kind of syndication of inside information, obtained by Bloomberg reporters from anonymous sources somehow apprised of the companies that the journalists cover. But Bloomberg doesn't trade. Its clients do. Bloomberg just reports, and there is nothing illegal about that.

Isn’t insider trading is defined as trading based on non-public information not available to other shareholders. (So you don’t have to be an actual insider - you could be trading on information you got by dumpster-diving).

That would make it a grey-area if it’s information that will eventually be made public within an hour. I guess it depends on the type of trades you perform...

or 325,000 users counts as broadly disseminated

Insider trading is complicated in the US because it is a creature of the executive branch and the courts. Congress largely quiet on exactly what constitutes it, and the regulator learning to leverage broad fraud statutes and a few wins in the court, alongside many losses.

It also needs to be material information.

No, it's trading with information that you shouldn't have had access to. Think of it as being about misappropriate of information, theft, not fairness. If I have private satellites that I use to photograph cropland, and I use that information to trade agriculture futures, this is not insider trading even if nobody else is privy to the information. Similarly, if I have investigative journalists working for me and I trade based on their unpublished investigations, that's also not insider trading unless the journalists got the information from an insider. It's not about whether the public does have the information, it's about whether the information was gotten from someone who had a legal responsibility to not share it.

The finance writer Matt Levine writes on this topic somewhat frequently, I scrounged up an example.

https://www.bloomberg.com/opinion/articles/2019-03-13/you-ha...

No, insider trading does not mean “non-public information not available to other shareholders”, at least not in the US. It has to be information generated internally that was meant to be kept confidential.

There are many funds that base their entire existence on doing private research about companies and making trading decisions on this non-public research.

Visceral example: you spot a CEO get fatally run over by a car. You can immediately bet against the company via short selling, options, etc. even though the knowledge of his/her death is definitely non-public at that time.

I have only followed the story in passing but I believe LIBOR rates were fixed in a Bloomberg terminal chatroom called "The Cartel":

https://www.buzzfeednews.com/article/matthewzeitlin/why-bank...

It's hard for me to Google this because Bloomberg.com's own articles leave this out and simply refer to it as "a chatroom" not "a Bloomberg terminal chatroom".

That's what I thought of.

Some chat snippets here:

https://www.businessinsider.com/read-the-bloomberg-chats-tha...

It’s accessing the chat data. If a bad actor could access incoming chats from a major broker’s PT/Swaps desk, a great deal of money could be made.

That's for any piece of trading software used at brokers, banks and asset managers. Bloomberg IB is a central piece of trading architecture but not more so than many others.

This isn't legal advice, but when you do something illegal, it's best not to do it in a semi-public forum that is tracked by your employer and would be an obvious place for law enforcement to look. Everyone who uses a Bloomberg terminal knows that their employer's legal department can and will look at logs of their conversations. Does insider trading happen there? Probably... people do stupid stuff all the time when it comes to insider trading, such as using their work emails. But it's definitely not the core value of a terminal for anyone.

You never need to preface any comment with a disclaimer about it not being legal advice.

It probably means they think it is worth 25,000*Factor -- In sales that factor can be quite high, 4, 6 or even 8 as a mark of a good sales person. In other industries it could be lower, but you expect that terminal to produce significantly more than it costs if you are willing to pay for it.

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