# Insider Trading

*Professional & Ethics — Finicade finance glossary*

Insider trading is dealing in a security while holding material non-public information about it, and in most jurisdictions it is a criminal offence. The rationale is market integrity rather than fairness alone: if outsiders believe prices reflect information they can never see, they demand a wider spread and liquidity dries up. Liability extends to tippees who knew the source was breaching a duty, which is how the chain of prosecutions usually runs.

**Also known as:** insider dealing, trading on inside information

**Related terms:** [Material Nonpublic Information](https://finicade.com/glossary/material-nonpublic-information), [Information Barrier](https://finicade.com/glossary/information-barrier), [Front Running](https://finicade.com/glossary/front-running), [Disclosure](https://finicade.com/glossary/disclosure), [Market Manipulation](https://finicade.com/glossary/market-manipulation)

Source: https://finicade.com/glossary/insider-trading