question?, page-2

re: trading question? lots of answers The only people who know when an announcement is going to be made and what its going to have in it are the companies directors.

These people are not allowed to inform the market in advance of what might be in an announcement and they are not allowed to buy or sell shares knowing information that others don't know. That's called inside trading and its illegal. Plus, I know no-one does it because the ASX says so.

Sometimes the price of a share will take off just before an announcement, especially a good one. That isn't inside trading, that is people with psychic abilities who have mastered them to the art of foreseeing events on the sharemarket. Sometimes these people also happen to be directors but that doesn't matter then.

These skills are erratic because sometimes the ASX will issue a notice to a stock that is riding rapidly for no reason asking if they know why. This is called issuing a speeding ticket.

Usually the directors do not know why, even when sometimes as little as an hour later they announce a deal that has taken months to consumate.

Sometimes, the share price will take off in a stock just before an announcement and the announcement will be bad. Then lots of stock is sold and it often turns out that directors have sold a lot of their stock. This can be for two reasons.

1/ Good fortune.

2/ A process called 'improving the liquidity in a stock' This usually intails leaving lots of newbie daytraders holding a stock for a while knowing they will have to selll one day when the shareprice halves thus improving the number of shares being traded.

Cheers,