Is copying other traders insider trading?

External question — Personal Finance Stack Exchange Author: ronald christenkkson Original post: https://money.stackexchange.com/questions/161545 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. I just read this article: https://www.cnbc.com/2021/09/17/insider-trading-suspicious-bets-made-before-goldmans-2point2-billion-acquisition-of-greensky.html This part intrigued me: " Volumes went from 153 calls on Sept. 7 to 7,175 calls by Sept. 9, according to Jon Najarian, a veteran trader and CNBC contributor. By Sept. 13, two days before the announcement, call volumes hit 12,755. The contracts were mostly sold for a profit on Sept. 15, he said. " We can all see options activity online. So if I just browsed for Greensky on Yahoo.com for example, I would see the 12755 call volume on Sept. 13, a massive aberration. Now if I just bought this call option based purely on what I see online that day, and two days later the announcement is made and I make an extraordinary profit, would this be illegal? Thanks!

External answer — Personal Finance Stack Exchange Author: littleadv Original post: https://money.stackexchange.com/a/161546 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Insider trading is trading based on information not publicly available. You're describing a speculation strategy based on public information (trading volume). That's how a lot of day-traders make their money. It's not "insider" trading because there's no "insider" secret not publicly available that's driving your decision making. That said, by the time retail traders react to such information, it is likely already to be priced into the market.