Accounting Error

Finance allah shmoop what is asymmetric information Well asymmetry happens

when two sides of something aren't equal think giant red

wood and we'd regular crab and fiddler crab recumbent bike

and a eunice cycle well in the financial world asymmetric

information exists when one side of a transaction think inside

trader scumbag who collects briefcases full of cash from somalia

in overlords versus a normal joe six pack investor trying

to fairly participate in the stock market So he has

a pension to retire on while bouncing great grandchildren on

his newly installed robotic knees Well discount needs don't go

there Your summer college job is cleaning the house of

the ceo of whatever dot com currently trading at eighteen

bucks a share as you empty her garbage one night

pushing away adult diapers in the process Yes she has

a lot of pressure on the job on this conference

calls and saying ooh a lot I push that away

You realize that microsoft is buying her company for thirty

dollars a share You then by a ton of stock

at eighteen bucks you had a symmetric information because you

dug through the trash and you found the memo from

whoever the ceo is of microsoft these days to her

and that was bad You didn't have to act on

that information like you could have just done a whole

lot of nothing and not repeated it to anyone and

left the stock at eighteen dollars until it was all

in the news at thirty and moved on and still

have your job cleaning her trash Having inside information isn't

illegal but doing something to benefit yourself tor You know

your loved ones is illegal So if you trade based

on inside asymmetric information well then you just committed a

felony It's called insider trading And while here's hoping you

look good and either orange or black or or both