Something being technically legal under some conditions doesn't automatically make it sound financial advice.

There's a lot of companies out there. It's easy to pick one that definitely won't get you in to trouble instead of one that probably won't get you in to trouble.

If you work for a company that grants stock via shares or options, you're going to have to sell them at some point. At which point insider trading applies.

And your company will carefully tell you when the safe times to do so (usually a month or so after a quarterly result or some such announcement)

its not that common. i have a friend who has blackout periods on his RSUs, but no company ive worked at with RSUs has any black out period.

every company I've worked for that's gone public (3 of them now) has had blackout periods

My very very very very large company doesn’t have stock lockup like that. I can sell my granted and vested stock at any time, unlike previous employers. Weird.

It really depends a lot on your role. I would assume your CFO, that knows the figures he will share in the market and analysts expectations, is indeed vetoed.

Most Senior Execs and the whole Financial division typically fall under these umbrellas.

My last company which was smaller, I was locked out for a month around earnings reports. I probably have more privileged information now, but I know not to trade on it by waiting the appropriate time.

>And your company will carefully tell you when the safe times to do so

not familiar with the whole situation, but I'd worry the company would tell me times that were advantageous for it, not necessarily for me.

on edit: I suppose the downvotes are HNs way of telling me that would be a silly thing to worry about. Thanks for the clarification.

on second edit: thanks for the actual clarifications as to why I would be silly to worry about that kind of thing.

I think its usually a very pre-arranged time (like once a quarter shortly after the quarterly earnings since you cant know what's in the next quarterly earning if the previous one just happened).

Besides, are there really bad and good times for the company? Its not like the company itself is affected, just the stock holders. Management wants stock to go up because management usually owns stock. So screwing you would also screw themselves.

Last of all, if you dont like the blackout periods, you can just setup an arms length plan to bypass it https://www.investopedia.com/terms/r/rule-10b5-1.asp

No, actually, it is the opposite. For legal compliance, the company tells you when it is safe for you to trade, assuming that you do not have any insider information that would affect the stock price during the allowed periods, without getting into legal trouble.

My company does this and it is a relief for legal compliance reasons.

That is true. And my philosophy is, I will sell the moment it vests (subject to sell windows of course). I will take the money and invest it elsewhere.

I think it's sound financial advice, I'm just saying "don't trade your company's stocks" isn't really a sufficient solution to avoiding insider trading.

Sure. But there are so many companies listed. Will the world for you totally turn upside down if you stay away from one listed company? Maybe a particular trade is legal, maybe it is not. Why bother to take the trouble?

Adding a note, according to the initial filings from the SEC:

>As further explained in Amazon’s Insider Trading FAQs, “puts, calls, warrants and other types of option securities” were required to “be cleared in advance with the Legal Department, regardless of whether that employee is otherwise subject to preclearance or to the trading window, even if that employee is not in possession of material nonpublic information.”

Amazon employees require Amazon's Legal approval before trading Amazon options.

page 6, #17-21

> puts, calls, warrants and other types of option securities

These are not stock. You definitely don’t need Amazon Legal approval to trade Amazon stock - otherwise all employees that get RSUs would need approval to sell their stock.

You're correct, let me update my wording.

> > “puts, calls, warrants and other types of option securities”

> Amazon employees require Amazon's Legal approval before trading Amazon stock.

Options are not stock, they're options. Employees are generally (maybe always?) restricted from trading in derivatives like options. That doesn't mean they can't trade stock (outside blackout windows).

Plenty of employers have company-wide blackouts for any stock trade in advance of earnings. So even if you don't have access to inside information you may be subject to company policies that prohibit it.

Yeah it's lame. Also they might prohibit shorting of the stock (always), preventing employees from locking in their stock option gains.

>Millions of investors do that with no problems.

Err, example please? I'm totally blanking here, not gonna lie.

If you are an insider at a company you work at, they tell you and you have to adhere to additional rules and blackouts around announcement and earnings time.

This is not common. In the story, the guy's wife worked in finance so had confidential info about earnings. The rank and file can trade whenever the hell we want with whatever stock we want, including our employer's. No one bats an eye.

Really? Even as a rank and file pleb I wasn’t allowed to trade except for about 2-3 weeks after earnings calls. I assumed that was the norm everywhere.

That is the norm. True insiders are subject to additional restrictions, and often set up a 10b5 plan to set conditions under which stock may be traded.

In almost every case, no employees (insider or otherwise) are permitted to sell derivatives (calls, puts), while they are employed.

I have been on insider list and subject to blackouts just for being a mobile developer. I don't know if all employees were considered insiders but at least all developers were.

Err, wouldn't most of these millions be employees of the company, who receive stock options as a benefit or a bonus?

Some employees get options. Others get grants or ESPP discounts.

You and your family doing your trades out of blackout periods, mainly. You can buy products or receive them as comp without problem.

Even if you do have access to insider information it should be (in my opinion) still legal to trade the stock.

There should instead be restrictions on the time for an order to go through, not on the act of insider trading.

Insiders are allowed to trade, however there are time limits. Plans to buy or sell must be disclosed well in advance and black out periods can apply.