Does Insider Trading Really Move Stock Prices ?

  title={Does Insider Trading Really Move Stock Prices ?},
  author={Sugato Chakravarty and John J. McConnell},
Prior studies have reported a positive correlation between insider trading and stock price changes implying that insider (i.e., informed) trades affect price discovery differently than non-insider (i.e., uninformed) trades. Based on these results, various scholars have argued for the legalization of insider trading to facilitate rapid price discovery. We analyze the trading activity of a confessed inside trader, Ivan Boesky, in Carnation's stock just prior to Nestle's 1984 acquisition of… CONTINUE READING