An insider is anyone associated with the company with access to material non-public information such as board members, C-Level executives, and directors, who are most knowledgeable about the company’s future. Trading based on material non-public information is illegal as it can affect a stock’s performance if made public. Companies are legally required to report insider transactions.
An insider gets stocks of a company by either exercising employee stock option, open market purchases or as founding member of the company. Insiders usually keep a long time horizon while making an investment.
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