It would seem that in today’s stock market trading, in which, commissions have never been lower, as in oftentimes, those commissions being actually free in the buying and selling of those equities – that we also do so find that there are certain financial companies that specialize in the trading of stocks, in which, in fractions of a second, they are able to manufacture a profit, by the small difference between the buy and ask prices so being detected, and thereby, to buy or sell a particular stock, right before another entity purchases or sells it, thereby making money from that small difference in price, which in conjunction with the sheer volume of trades that they so do, every single trading day, profits their organization.
So too, it is a known fact, that quarterly earnings have a definite impact upon a given stock’s price, in which, those stocks that miss their quarterly earnings are often punished, especially when that miss is huge; whereas, those companies that unexpectedly crush earnings, are often rewarded with a higher stock price. The thing about earnings, is that the SEC requires that companies issue their earnings statements no later than 45 days after the end of a given quarter, thereby providing an awful lot of time, for those that know what those earnings will be, to possibly profit from such.
While, it is true, that insider trading is a crime, of which, occasionally some prominent names have been convicted of such, to somehow believe that everyone engaged in insider trading, is always found out, would be incorrect. Further to the point, when it comes to making a profit, or the making of money on a particular investment, most people and many an institution have a strong desire to be successful in that which they invest in, and in consideration that in today’s market, the “buy and hold” investor seems to be a dying breed, we do so find that those then that know what a particular company’s earnings will be before nearly everyone else, have actionable information, which is of value to a considerable amount of people, as well as to institutions. So then, to believe, somehow that those in the know, will never be susceptible to the making of money by divulging such, or the trading on such, as through dark pools or offshore brokerage accounts, would be rather naïve.
Indeed, reliable information always has value, especially when that information is known only by a few people or entities. So too, America, seems to be a nation that celebrates people and institutions that have money, and further to the point, how that money was made seems to be of no real importance to a lot of people, a significant amount of the time. This thus signifies, that there is plenty of opportunity, for those that have connections, or are the connected, to profit upon information, such as knowing the earnings of a particular company before it is released, to their own benefit, without having to overly worry that such will be discovered, because there are a multitude of ways to disseminate actionable information, which is hard to detect, even when being ostensibly observed. So then, in short, there has never been a better time to game the stock market, because earnings matter and those that know those earnings ahead of time, are in the supreme pole position to profit.