> In the long run, if participants feel they can't ever win because there's always an insider taking advantage, then participants might leave and that's to the detriment of the market.
In the US, there's no general rule that protects you against trading against someone with insider information. Mostly what's forbidden is an employee X of company Y trading on her own account; but if X acts on behalf of Y, they can go crazy.
For you on the other side of the trade, it doesn't really matter whether you sell your Standard Oil stock to someone officially acting on behalf of Berkshire Hathaway who knows that next week Warren Buffett will announce that they are going to buy Standard Oil, or whether you are selling your stock to someone who has the same information, but is not officially authorised by Berkshire Hathaway.
Yet, people still trade in the stock market just fine.
I would suggest as a retail investor you shouldn't buy individual stocks anyway: just buy an index fund.
Until fairly recently, there was no rule against insider trading in commodities in the US, and people still traded them.
In any case, your arguments suggest that exchanges should be able to decide whether they want to allow insider trading, and companies should be allowed to decide which exchange they want to list at (so they can indirectly decide whether to allow insider trading). No need for a blanket one-size-fits-none rule.
In the US, there's no general rule that protects you against trading against someone with insider information. Mostly what's forbidden is an employee X of company Y trading on her own account; but if X acts on behalf of Y, they can go crazy.
For you on the other side of the trade, it doesn't really matter whether you sell your Standard Oil stock to someone officially acting on behalf of Berkshire Hathaway who knows that next week Warren Buffett will announce that they are going to buy Standard Oil, or whether you are selling your stock to someone who has the same information, but is not officially authorised by Berkshire Hathaway.
Yet, people still trade in the stock market just fine.
I would suggest as a retail investor you shouldn't buy individual stocks anyway: just buy an index fund.
Until fairly recently, there was no rule against insider trading in commodities in the US, and people still traded them.
In any case, your arguments suggest that exchanges should be able to decide whether they want to allow insider trading, and companies should be allowed to decide which exchange they want to list at (so they can indirectly decide whether to allow insider trading). No need for a blanket one-size-fits-none rule.