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What is Insider Trading?
Insider trading is an unfair practice wherein insiders, such as key employees or executives, who have access to valuable information about the company, take undue advantage to make profits by trading the company’s stocks. It is highly discouraged by SEBI to facilitate fair trading in the market.
In India, insider trading has serious implications. Traders and intermediaries must make themselves aware of the regulations involving price sensitive information. Price sensitive information includes that which is revealed to only a set of people, the usage of which can give traders an unlawful upper hand while trading in the market.
