stock options

[rgresham]

oregon: If a startup company knows that its roll-out promotion will affect the stocks of a company who's products are featured in the new company's promotion, is it legal for that new company to obtain options on those affected company's stocks prior to the roll-out?

 

[ALawyer]

Trading on inside, non-public, information provided by the company whose shares are being bought or sold, or obtained from those dealing with the company in certain relationships of trust and confidence, is illegal.

BUT if I am an smart investor and do research and find out that company A has a new product that I think will be terrific from public sources (such as a patent grant) and I buy shares of A, or if I learn that company X is about to come out with new product that will destroy competitor Y's profit margins, there is nothing wrong with me selling competitor Y's shares short.