Insider information in the stock market: speculative effect
Insider information in the stock market: speculative effect

Summary/Abstract: Today, under the present conditions of integration of the stock market into the international financial space, the use of insider information in the market attracts special interest since it causes a biased market pricing and unfair competition resulting in financial losses for securities market participants and reduces the investing image of the country and stock issuing companies in general. The aim of the research is a theoretical study of speculative operations, assessment of insider information in Ukraine’s stock market, and identification of ways to improve the regulatory process of insider speculation. The study suggests that price speculation by using insider information is carried for profit and encourages increased liquidity of securities: the process of speculation affects increased liquidity for the asset of special interest, adjusts pricing relative to fundamental value and makes it possible to clearly track the actions of the participants after the disclosure of financial information. In order to improve the regulation of insiders’ actions in the market, the author suggests the need for insider reporting of all transactions to regulatory authorities. Thus, this information would be available to all market participants; it would be included in the information structure of market participants and could be used for qualitative analysis of information, which, in our opinion, would promote effective pricing, reduce the level of loss of market participants and increase yield of their operations.

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