      onlycfo.io · 2023-09-22
      · 986d
    

Insider Trading & 45,000% OneDay Gains: Understanding Insider Trading, How It Is Caught, and What Not to Do

This article analyzes a suspicious $22K Splunk call option trade that generated $10M in gains following a Cisco acquisition announcement, using it as a case study to explain legal vs. illegal insider trading, SEC detection mechanisms, and the liabilities for both traders and tippers. The author covers material non-public information standards, blackout periods, and enforcement risks including up to 20 years imprisonment.

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Metrics in this report

Call Option Leverage Impact

45650percent_daily_gain

Splunk $127 strike call options purchased at $0.04 on Wednesday, valued at $18 on Thursday following 20% stock price increase from acquisition announcement

Insider Trading Prison Sentence Maximum

20years

maximum

Potential criminal penalty for illegal insider trading conviction in the United States