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Comment by smattiso | Hacker News Reader

Relative volatility of KYAK was 3x the normal amount during the day. The news was released after hours. Long live insider trading!

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Or, it could be that they were releasing their Q3 financials today.

Insider trading sends important price signals to the market. The alternative is LESS information.

That's completely idiotic, and I hope you feel ashamed of what you wrote.

The problem isn't more or less information, it's that insider trading creates two classes of people: Those select few "in the know" who can reap massive profits by getting an illegal phone call, and the suckers.

This ad hominem comment is inappropriate. It is certainly not "completely idiotic". There is a lot of intelligent discussion on the issue in some places. For example: http://www.fff.org/comment/com0306f.asp .

This is not an "intelligent discussion." Did you read this article? He sets up a straw man by comparing specialized knowledge to facts in his first argument. Everyone can know the odds in Blackjack by card-counting, but no one should know the next card in the deck. This is a better comparison of insider trading because using statistics and predictions of market activities based on 'guesses' is perfectly fair, but actually knowing materially negative news that is confidential puts you at an unfair advantage in a market system. I mean, how far would you take the argument... so can the CEO sell his shares before the news? What about the FDA committee chair? How about if a scientist shorted shares before rendering his judgement that the drug should not be approved?

Insider trading is just another way for the privileged and wealthy to get richer and small investors and pensions to get robbed.

You have to ask yourself, what is the point of the market? I'd say to efficiently allocate resources, in order to do that one should be able to use any and all knowledge they have available to them -- it allows the market to find the appropriate price quicker. If small investors and pensions get "robbed" then they'll adapt or leave the market.

Or use whatever advantage you can get to dump the shares in the greater fool.

Having an elite crowd with an unfair advantage is going to make it hard to get future IPOs or companies issuing more stock to generate much interest in their offerings.

So the market will become more conservative in cases with low transparency? Good.

The purpose of markets is not to provide a casino. The purpose is the efficient allocation of resources. Don't know anything about sector X? Why the hell are you entitled to a fair shot at gambling in sector X?

You don't understand what an "ad homnimem" is. Simply insulting someone for saying something stupid is not an ad hominem. My argument would need to be of the form "That person is <unsavory characteristic>, therefore he is wrong in his argument".

That is not what I did, therefore it was not an ad hominem.

Please learn the definitions of phrases before you use them in conversation.

You persist in believing that the market is about fairness rather than efficient allocation of goods. Have fun with that.

agree 100% its an epidemic.

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