Should I Insider Trade?

Probably not, but if you're gonna do it anyway, be sure to check out The Laws.¹

The rules are:

1. Don't do it.
2. Don’t do it by buying short-dated out-of-the-money call options on merger targets.²
3. Don’t text or email about it.³
4. Don’t do it in your mother’s account.⁴
5. Don’t do it by planting bombs at a company and shorting its stock.⁵
6. Don’t do it while employed at the Securities and Exchange Commission.⁶
7. Don’t Google “how to insider trade without getting caught” before doing it.⁷
8. If you didn’t insider trade, don’t forget and accidentally confess to insider trading.⁸
9. If you are going to insider trade, do it in a company that is far away from a Securities and Exchange Commission office. Like, physically.⁹
10. If you are already under a federal ethics investigation about your ownership or promotion of a stock, don’t insider trade that stock.¹⁰
11. If you are planning to insider trade, probably don’t keep a Google Doc spreadsheet of the Money Stuff Laws of Insider Trading. That will definitely show up in the SEC’s complaint against you. If you’re gonna insider trade, you have to keep track of these rules in your head, even at the risk of forgetting a few now and then. ¹¹
    • OR If you are making plans to share your life, and finances, with a certain special someone, and you overhear her working on a nonpublic merger deal, before you go out and buy short-dated out-of-the-money call options on the merger target, maybe tell her first?¹²
12. If you insider trade by buying short-dated out-of-the-money call options on a merger target, and the Securities and Exchange Commission freezes your profits, don't show up in a U.S. court to ask for them back.¹³
    • Corollary: Go ahead and show up in court to ask for them back as long as you've deleted all the evidence first.¹⁴
13. If you are going to insider trade, or commit securities fraud generally, don’t talk loudly about it on the Acela from Washington to New York.¹⁵
14. Don’t insider trade while drunk.¹⁶
    • Corollary: Only insider trade while drunk.¹⁷
15. Don't insider trade if you’re a police chief.¹⁸

Inspired by Matt Levine's Money Stuff.

Contributors

• @mcdickenson
• @glyph
• @ncteisen

1: The 10 Laws of Insider Trading – So Far
2: Social Software and Suspicious Options
3: Boardroom Battles and Car Washes
4: Robot Traders and Super Hedge Funds
5: Juice Hacking and Mortage Tech
6: Investing Stores and Libyan Bribes
7: Main Street and Premium Listings
8: Memory Mortages and Puzzles
9: Indexes, Insiders, and ICOs
10: Musk's Money Mystery Intrigues SEC
11: The 10 Laws of Insider Trading – So Far
12: Warren Buffet Funds an Elephant
13: Insider Trading Is Not a Romantic Surprise
14: Softbank has a Bigger, Weirder Vision
15: The Libor Change is Coming
16: Don't Insider Trade Drunk on the Squash Court
17: Debt Costs More When Rates Go Up
18: The Big Banks Aren’t Stressed