How to Hold Based on Insider Information

by Johnny Debacle

Long or Short Capital receives a lot of reader email asking us how to trade using insider information. Naturally, we are experts in this field and we find that insider trading is a strategy which is extremely effective, especially when you route all your trading through a bevy of untraceable Cayman Island shell corporations. Many readers already know and practice buying and selling on material non-public info, so we thought it would be more helpful if we explored how to hold on material non-public info.

  1. Have a position in a company which issues tradeable public securities (stocks, options, bonds, etc).
  2. Obtain material non-public information from insiders of this same company.
  3. Do not buy any of this company’s tradeable public securities.
  4. Do not sell any of this company’s tradeable public securities.
  5. Profit.
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POSTED: 02/15/07 9:54 AM
Comment (6)


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Comments

  1. Zbignew
    February 15th, 2007 | 6:07 pm

    Wow.

    Just wow.

    Knowledge IS power!

    Thanks, Long or Short Capital!

  2. PBateman
    February 15th, 2007 | 6:12 pm

    I believe that’s called sacrcasm folks.

  3. Goldman Slacks
    February 15th, 2007 | 6:18 pm

    All this financial engineering is so complicated. When you’re not buying, is it okay to make some purchases? Conversely when you’re not selling, is it okay to divest some of your position? It’s all so mindboggling.

  4. Mr Juggles
    February 15th, 2007 | 6:24 pm

    You may mock “Holding on private info” but we are strong believers in it. It incorporates the upside of both buying and selling. Think about that. It’s pretty powerful.

    To paraphrase Cool Hand Luke:

    “Sometimes [doing] nothing is a pretty good hand”

  5. JCauto
    February 16th, 2007 | 5:58 am

    The most attractive thing? You don’t have to actually be party to the inside information to participate in the strategy. You can just buy the security and hold while all sorts of non-public information is not released to the public.

  6. Zbignew
    February 16th, 2007 | 10:12 am

    PBateman is putting words in my mouth.

    Since yesterday, I’ve had more holds than a wrestling meet at a gay bath house. You should see all the hold positions I’m sitting on! I’m fuckin’ killin’ it!