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Market Intelligence › Basic Terminologies
The scope of unpublished price sensitive information, and how it can reach you
Published by The Retail Trader · AUG 02, 2026 · Compliance & Regulation
People think of insider trading as a problem only for the top people in big companies. Its definition is much broader, and an ordinary employee or their relative can also fall within its scope.
The law speaks of unpublished price sensitive information — information that is not public and that could move the price once it becomes public. Results, a big deal, a management change, all of these come under it.
And an "insider" is not only a director. Anyone who has received that information cannot trade in that stock with that information.
These scenarios really do come up:
• Trading in your own company's shares before its results.
• Trading on inside information received from home or from a friend.
• Trading on information received as a vendor or consultant.
• Passing that information to someone else so they can trade.
For people working in a listed company, the company has its own trading window and pre-clearance process — following it is not just a formality. And one simple test always works: if this information is not in the newspaper tomorrow and you are trading on it, stop.
This article is for education only — it is not a buy or sell recommendation, makes no claim of a guaranteed return, and is not advisory. Rules, rates and mechanics are changed from time to time by the exchanges, SEBI and RBI, so verify every number yourself with your broker or the official source.