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I work in the IT department at a Futures FCM. While I'm aware that there are insider trading rules with respect to our company stock, I'm still not clear on what it means for my own participation in the market. I don't have enough capital to buy and sell futures through the company I work for (we only take >$1 million USD accounts). And I would like to start trading on my own. Is it legal for me to open my own account with another broker and make trades?

  • Keep in mind that insider trading is only one of the possible bad things employees might do. You could also front run your employers customers, given advanced knowledge of the trades being executed. For this reason your company probably publishes a policy on who's restricted and what those restrictions are. – jldugger Oct 5 '11 at 0:30
  • I do have access to production data albeit delayed or limited. So that is where my main concern about it comes from. I can see individual positions of clients in the futures contracts. – Matt Phillips Oct 5 '11 at 7:23
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Ask someone in Human Resources. I seriously doubt you are the first person to ask this question for their company and they should be more than happy to help.

  • HR will likely refer OP to legal, still no problem as long as you follow their advice. – JTP - Apologise to Monica Oct 4 '11 at 3:07
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There is normally a policy at the organisation that would restrict trades or allow trades under certain conditions. This would be in accordance with the current regulations as well as Institutions own ethical standards.

Typical I have seen is that Technology roles are to extent not considered sensitive, ie the employees in this job function normally do not access sensitive data [unless your role is analyst or production support]. An employee in exempt roles are allowed to trade in securities directly with other broker or invest in broad based Mutual Funds or engage a portfolio management services from a reputed organisation.

It is irrelevant that your company only deals with amounts > 1 Million, infact if you were to know what stock the one million is going into, you may buy it slightly earlier and when the company places the large order, the stock typically moves upwards slightly, enough for you to make some good money. That is Not allowed.

But its best you get hold of a document that would layout the do' and don't in your organisation. All such organisation are mandated to have a written policy in this regard.

  • My company only does ADR's for stocks. And the 1 million was a reference to the fact that I can't just get an account with my company because they only deal with institutional speculators/hedgers so I don't have enough money. It is primarly Futures contracts and OTC derivatives. From what I have read on the web only stocks are considered insider trading not futures markets. I have sent emails to people in my company to find out for sure. I just wanted to gauge what people had experience with. – Matt Phillips Oct 5 '11 at 7:21

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