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[–] 7 points 7 months ago (13 children)

Someone more knowledgeable clarify this to me ?

"Pete Hegseth tried to make a LOSING insider trade on his advance knowledge of Trump's Iran war plans, which he advised to start," Grant Stern, managing editor of Occupy Democrats, posted on X. "This is the height of criminality and incompetence."

How was the trade losing ? whatever stock it was went down ? was it something akin to weapons manufacturing ? and if I understand correctly, it was expected to go up because of their involvement in the "war effort" ?

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  • [–] 7 points 7 months ago (4 children)

    You can gamble on whether a stock price will rise or fall. When going to war, stock prices for war companies rise because they are expected to get a lot of business, but if that call to war is suddenly canceled, then the stock price for that company decreases.

    If he made a losing bet, one of two things happened:

    1. The value of the stock was going to drop way below the value it started at, so he would earn a large payout on that gamble.

    2. He was funneling large amounts of money to other insider traders.

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  • [–] 2 points 7 months ago (3 children)

    Thank you. I didn't know that was possible. How do you do such a gamble, practically ? Is it something that banks offer, or something you can do from a smartphone app ?

    Additionally, how does #2 work ?

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  • [–] 2 points 7 months ago (1 child)

    You can trade outside of trading hours by paying extra for the trade. When you do this, you can buy/sell only to others who have also paid extra. This means you have some extra control over who gets your shares and when. In addition, you can sell shares directly to other people anytime if you physically own them.

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  • [–] 4 points 7 months ago (4 children)

    Don't have to be a good criminal to do crime! Dude's an amateur at insider-trading!

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  • [–] 2 points 7 months ago (2 children)

    Martha Stewart did this shit. You might argue she is more competent than Hegseth. And she went to prison.

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