Question

Why is the level of insider trades important in analyzing a company?

Answer 1

Solution. An organization operating in business in competitive economic market, call its directors, officers and employees as internals and administers internal trading activities through investigating output volume of an organization. Trading done and under the regulations of US Securities and Exchange Commission under specified norms and time accounts as legal internal trading of shares. This level of insider trading analyzing important in a company in order to restrict and regulate illegal measure of internal trading within an organization, it encompasses monitoring relationships of trust between the organization and external who invests interest in its activities, and monitors use of non public information in earning abnormal profit and calls for penalties if found illegal.