Message Font: Serif | Sans-Serif
No. of Recommendations: 0
InvestorGrrl wrote:
Is it okay to short the stock of the company your partner works for?

Perhaps, perhaps not. Many companies have insider trading policies that require that employees and their families not engage in certain types of trading of company stock. Most often they preclude short-selling and option trading. They may also limit short term buy/sell of stock. The higher the level (e.g. director, or vice president) in the company, the more serious the restrictions, but even the peons may be covered (the guy in the shipping department may have knowledge that a big customer has just returned an entire order ... trading on that knowledge is illegal).

This can be serious stuff ... if you sell short, and then the stock takes a surprise (to most investors) dive ... then you may find yourself talking to the government about why you chose to sell short. People do go to jail for insider trading (though its more common to just get fined).

Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.