3 Insider Trading Myths That Keep Prop Traders From Losing Their Funded Accounts

Why insider-trading myths matter to prop traders

Insider-trading rules are not limited to company executives. Traders can face serious consequences when they act on material, non-public information, including tips received through personal contacts, private forums, or chat rooms.

3 Insider Trading Myths Every Prop Trader Should Understand


The article highlights three common misconceptions: that only employees can violate insider-trading laws, that online tips are automatically public, and that small trades will go unnoticed. It also outlines practical safeguards for funded-account traders.

  • Trade from public, verifiable information.
  • Be cautious with unsolicited tips and rumors.
  • Document important sources and follow your firm’s compliance policies.
  • Ask a compliance professional when information or activity seems questionable.

Trading involves risk. Past performance does not guarantee future results. This content is educational, not financial advice.

Continue reading on SMP Fund: https://smpfund.com/insider-trading-myths-prop-traders-compliance

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