bobmsmythe

Companies are required by the SEC to keep information such as earnings private until released publicly. In the most general sense, trading on information that hasn't been released to the public is insider trading. You're unlikely to be charged, though, unless you *specifically* knew the information was insider information. That's exactly what the deal is with Martha Stewart. Even if she did know that ImClone's application for their new medicine was going to be rejected, it would also have to be proved that she knew this information was "inside." Typically, unless you know somebody in the management of a company, you don't have to worry about it. There's always a certain amount of insider trading before news is released, usually amongst company employees, family, brokers "in the know," and sometimes journalists. That's one of the ways that we in the industry look for something that's about to make a move or have news, we examine the particulars of stocks in terms of volume and trade count and look for those that are trading on higher-than-average volume with no news.

Bob