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I really don’t understand how these markets survive a competent DOJ considering the rate they’re having to ban people for “insider trading”. Fully appreciate t

I really don’t understand how these markets survive a competent DOJ considering the rate they’re having to ban people for “insider trading”. Fully appreciate the Unions position here.

wbl 13d ago
Insider trading is legal in commodities markets. If I am engaged in a hedging transaction I am doing so because I know about risks that I want to offload, and the buyer does also. You don't come to commodities markets without information.
- cucumber3732842 13d ago
  Exactly. Pit mine sees who's buying what and is worried copper will go down. Datacenter people see who's inking deals and are worried it's gonna go up. They both need to get big fancy loans from their bankers to execute their upcoming projects. The bankers won't like to see unbounded risk on their balance sheets. A futures contract exists to solve this problem. Not that this excuses some of the absurd stuff that goes on on the online betting platforms...
- CPLX 13d ago
  Just for context that’s not quite accurate. There certainly is a distinction in the rule versus securities markets, which I know is what you mean. But it’s more accurate to say participants can trade on lawfully obtained material nonpublic information absent some independent duty not to use it, which is much narrower than saying insider trading is generally legal.
- gavinsyancey 13d ago
  Hedging is not insider trading. Insider trading is trading based on material non-public information in breach of a duty or obtained through fraud. In that sense, it's more of a principal-agent problem. Also -- hedging is generally not done based on material non-public information, but rather to guard against known risks. Joe the farmer sells a bunch of wheat futures when he plants his wheat, not because he thinks the price will go down, but rather because if it does he goes bankrupt and he'd prefer to accept a known rate-of-return now.
  - jcalx 13d ago
    Note that's a US definition — Europe is stricter and draws the line at non-public information [0], aside from certain carveouts and safe harbors. Matt Levine describes this as "theft" (misappropriating nonpublic information) vs. "fairness" (using nonpublic information at all) — iirc if you're on a flight and overhear a passenger in business class talking about an upcoming merger they're working on, that's legal to trade on in the US but illegal in Europe. At least that's what I generally remember about "parity-of-information" theory. [0] https://blogs.law.ox.ac.uk/oblb/blog-post/2024/01/insider-dealing-outsiders-us-and-eu https://blogs.law.ox.ac.uk/oblb/blog-post/2024/01/insider-de...
- jameshart 13d ago
  If you and the buyer know about the risks then you’re not making a trade based on material non public information, are you? If you make a hedging trade while having material knowledge that you withhold from the counterparty… well, that sounds like it could be edging towards fraud. Like taking out life insurance while hiding a medical condition. But sure, it’s not against the law to do business with a sucker, so there’s degrees here.
  - FireBeyond 13d ago
    John Tuld, in Margin Call: Sam Rogers: And you're selling something that you know has no value. John Tuld: We are selling to willing buyers at the current fair market price.
- mcmcmc 13d ago
  Prediction markets are not remotely commodities markets, regardless of whatever the Trump admin says. It’s just gambling without any enforcement on cheating.
santadays 13d ago
https://news.kalshi.com/p/donald-trump-jr-strategic-advisor https://news.kalshi.com/p/donald-trump-jr-strategic-advisor
gavinsyancey 13d ago
Most competent people at the DOJ have either been fired or left. And the current administration seems to love insider trading, so long as they can be the insiders doing the trading.
- toomuchtodo 13d ago
  It lasts for now, it won’t survive when the political pendulum swings back. “Make hay grifting while the grifters shine.” is the current MO. “Temporary economic strip mining operation.”
  - infinite_spin 13d ago
    "Gather ye rosebuds while ye may" comes to mind
    - donkey_brains 13d ago
      Grift while the grifting’s good.
- abirch 13d ago
  I'll leave this here, Donald Trump Jr got a free stake in Kalshi. https://finance.yahoo.com/markets/options/articles/donald-trump-jr-got-kalshi-220055638.html https://finance.yahoo.com/markets/options/articles/donald-tr...
  - superxpro12 13d ago
    also known as a bribe
  - jameshart 13d ago
    Same old story, on a whole new scale. Donny Junior has a piece the numbers game on the east side, so the family makes sure the cops don’t come round asking too many questions…
  - throwaway287391 13d ago
lokar 13d ago
Corruption
Octoth0rpe 13d ago
> a competent DOJ The question answers itself.
luizfzs 13d ago
Lobbying
freejazz 13d ago
> competent DOJ Answered your own question.
HDThoreaun 13d ago
Insider trading is like the whole point of prediction markets. Users pay the insiders for better information
JohnTHaller 13d ago
There's nobody left at the DoJ in a high enough position to do anything like this. I'm not a gambler myself, but if I were, I certainly wouldn't used something that seems made for insider traders and suckers.

I really don’t understand how these markets survive a competent DOJ considering the rate they’re having to ban people for “insider trading”. Fully appreciate the Unions position here.

wbl 13d ago

Insider trading is legal in commodities markets. If I am engaged in a hedging transaction I am doing so because I know about risks that I want to offload, and the buyer does also. You don't come to commodities markets without information.

cucumber3732842 13d ago
Exactly. Pit mine sees who's buying what and is worried copper will go down. Datacenter people see who's inking deals and are worried it's gonna go up. They both need to get big fancy loans from their bankers to execute their upcoming projects. The bankers won't like to see unbounded risk on their balance sheets. A futures contract exists to solve this problem. Not that this excuses some of the absurd stuff that goes on on the online betting platforms...
CPLX 13d ago
Just for context that’s not quite accurate. There certainly is a distinction in the rule versus securities markets, which I know is what you mean. But it’s more accurate to say participants can trade on lawfully obtained material nonpublic information absent some independent duty not to use it, which is much narrower than saying insider trading is generally legal.
gavinsyancey 13d ago
Hedging is not insider trading. Insider trading is trading based on material non-public information in breach of a duty or obtained through fraud. In that sense, it's more of a principal-agent problem. Also -- hedging is generally not done based on material non-public information, but rather to guard against known risks. Joe the farmer sells a bunch of wheat futures when he plants his wheat, not because he thinks the price will go down, but rather because if it does he goes bankrupt and he'd prefer to accept a known rate-of-return now.
- jcalx 13d ago
  Note that's a US definition — Europe is stricter and draws the line at non-public information [0], aside from certain carveouts and safe harbors. Matt Levine describes this as "theft" (misappropriating nonpublic information) vs. "fairness" (using nonpublic information at all) — iirc if you're on a flight and overhear a passenger in business class talking about an upcoming merger they're working on, that's legal to trade on in the US but illegal in Europe. At least that's what I generally remember about "parity-of-information" theory. [0] https://blogs.law.ox.ac.uk/oblb/blog-post/2024/01/insider-dealing-outsiders-us-and-eu https://blogs.law.ox.ac.uk/oblb/blog-post/2024/01/insider-de...
jameshart 13d ago
If you and the buyer know about the risks then you’re not making a trade based on material non public information, are you? If you make a hedging trade while having material knowledge that you withhold from the counterparty… well, that sounds like it could be edging towards fraud. Like taking out life insurance while hiding a medical condition. But sure, it’s not against the law to do business with a sucker, so there’s degrees here.
- FireBeyond 13d ago
  John Tuld, in Margin Call: Sam Rogers: And you're selling something that you know has no value. John Tuld: We are selling to willing buyers at the current fair market price.
mcmcmc 13d ago
Prediction markets are not remotely commodities markets, regardless of whatever the Trump admin says. It’s just gambling without any enforcement on cheating.

santadays 13d ago

https://news.kalshi.com/p/donald-trump-jr-strategic-advisor https://news.kalshi.com/p/donald-trump-jr-strategic-advisor

gavinsyancey 13d ago

Most competent people at the DOJ have either been fired or left. And the current administration seems to love insider trading, so long as they can be the insiders doing the trading.

toomuchtodo 13d ago
It lasts for now, it won’t survive when the political pendulum swings back. “Make hay grifting while the grifters shine.” is the current MO. “Temporary economic strip mining operation.”
- infinite_spin 13d ago
  "Gather ye rosebuds while ye may" comes to mind
  - donkey_brains 13d ago
    Grift while the grifting’s good.
abirch 13d ago
I'll leave this here, Donald Trump Jr got a free stake in Kalshi. https://finance.yahoo.com/markets/options/articles/donald-trump-jr-got-kalshi-220055638.html https://finance.yahoo.com/markets/options/articles/donald-tr...
- superxpro12 13d ago
  also known as a bribe
- jameshart 13d ago
  Same old story, on a whole new scale. Donny Junior has a piece the numbers game on the east side, so the family makes sure the cops don’t come round asking too many questions…
- throwaway287391 13d ago

lokar 13d ago

Corruption

Octoth0rpe 13d ago

> a competent DOJ The question answers itself.

luizfzs 13d ago

Lobbying

freejazz 13d ago

> competent DOJ Answered your own question.

HDThoreaun 13d ago

Insider trading is like the whole point of prediction markets. Users pay the insiders for better information

JohnTHaller 13d ago

There's nobody left at the DoJ in a high enough position to do anything like this. I'm not a gambler myself, but if I were, I certainly wouldn't used something that seems made for insider traders and suckers.