What regulators may be scared of is the potential for this new media to leak stock price sensitive news to the market
Victoria, Australia (PRWEB) May 26, 2005
While the media digests the landmark Martha Stewart insider trading trial, the spotlight is now turning to blogs Â potentially the new hotspot for insider trading, according to David Jenyns of SystemTradingBlog.com. In fact, other market commentators are predicting that certain blogs may already be crossing the border between up-to-date news and insider trading.
Blog use has exploded in the last year, with an unpredictable and dramatic rise in both new users and new services. A study by Jeffrey Henning recently predicted that there will be a total of 53.4 million blogs by year's end, with thousands being created weekly.
"What regulators may be scared of is the potential for this new media to leak stock price sensitive news to the market," Mr. Jenyns explained. "Just think about it, thousands of trading blogs and hundreds of active bloggers from fortune 500 companies making posts every day. These bloggers talk about everything from their private lives to the inner working of the businesses. Sometimes this news is unreleased to the market and can potentially tip traders to buy or sell stocks. This is where the danger lies."
Insider trading is the buying or selling of stock based on information not available to the public, often caused by a leak. With this danger obviously increased by the availability and popularity of blogs, regulators have put a spotlight on the blog community. However, in the face of such blog scrutiny, trading experts such as David Jenyns believe financial blogging can actually benefit the everyday traders.
He explained, "For the first time in history, the playing field is starting to be leveled. No longer do brokers and their top clients have the edge. In trading, the edge is all about having cutting newsÂ and now today, with blogs such as mine, even everyday traders are using this edge to their advantage.Â
SystemTradingBlog.com is owned by Freelance Traders Pty Ltd and run by David Jenyns, professional trader, author and coach.
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