Market Integrity

You are an assistant coach on a professional sports team, and you learn that the team's star player has an injury that has not yet been disclosed to the public. The team has confidentiality rules that apply to you. Can you trade on this information?

No. The star player's undisclosed injury is confidential information that belongs to your employer (the team), not you. If you trade on this information before it becomes public, you are breaching a duty to your employer.

Your friend is the assistant coach on a professional sports team and tells you that the team's star player has an injury that has not been disclosed to the public. Your friend tells you that they cannot trade on the information, but encourages you to. Can you trade on this information?

No. Your friend has a duty to the team to keep the undisclosed injury confidential, and you know that your friend cannot trade on the information themselves. You cannot trade on the tip they passed to you.

You are a dancer at a sporting event halftime show. During rehearsals, you learn exactly what songs the headliner will perform. When you were hired, you signed a Non-Disclosure Agreement. Can you trade on this information?

No. Because you owe a duty of confidentiality, you cannot trade on your advance knowledge of the playlist.

You're a military service member or contractor with access to confidential information about upcoming operations. Can you trade on markets related to those operations?

No. You owe a duty of confidentiality, so you can't trade on your advance knowledge of the operations.

You are a candidate in a state political election. There is a market on whether you will drop out of the race. Can you trade?

No. Because you control the outcome of this market, you are prohibited from trading.

You are working on a campaign for a candidate in a state political election. There is a market on whether the candidate will drop out of the race. The candidate encourages you to buy a "Yes" share. Can you trade?

No. You cannot trade at the direction of anyone who holds a position of authority or influence sufficient to affect the outcome of an event.

You're the CEO of a public company. There's a Mentions market on whether you'll use a specific word during an upcoming earnings call. Can you trade?

No. You control the outcome of this market, so you're prohibited from trading.

You work for that CEO. There's a Mentions market on whether the CEO will use a specific word, and they encourage you to buy a "Yes" share. Can you trade?

No. You can't trade at the direction of anyone who holds a position of authority or influence over an outcome.

You sit in a park near the stadium where a sporting event will be held. From the park, you can hear rehearsals and you learn how long the pregame performance of the national anthem will run. Can you trade on this information?

Yes. As long as you do not owe a duty of confidentiality and obtained the information lawfully, you may trade on this information even if others do not have access to the same information.

You are an amateur meteorologist. You have developed your own forecast model to predict major weather events using publicly-available data. Can you trade on this information?

Yes. Your forecast model is non-public information, but it belongs to you and is based on publicly-available data. You would not breach any pre-existing duty owed to another person or entity by trading on your own forecast model.

You're following an upcoming election closely and want more information than what's publicly available. You hire a polling firm to run a custom poll using your own methodology and questions. Based on the results, you build a large position on the election market. Can you trade?

Yes. The poll was commissioned by you, with your own money and your own methodology. No one else owns that data — you created it. Acting on research you commissioned yourself is permitted.

You're a die-hard fan of a sport. For years, you've tracked your own custom statistics — not just what's on ESPN, but unique metrics you've designed by watching games yourself. You've built a dataset no one else has. Can you trade on markets in that sport?

Yes. The games are public, your observations are your own, and your custom dataset is your work product. You're free to trade on data you collected and analyzed yourself.