Employee personal trading guidelines

Discussion in 'Stocks' started by Matt Houston, Nov 4, 2010.

  1. Hi,

    Wasn't really sure which forum to post this in.

    I am based in the UK but work for a large US bank. I had my induction recently and got given the Personal Trading guidelines which will make the sort of trading most people do impossible. Some examples below:

    All trades to be cleared with complaince before being placed
    Futures and forex only to be used for hedging purposes
    All trades to be held for at least 30 days
    Stop loss to be at least 20% from entry price.

    So obviously I either don't trade or I don't comply with the rules.

    The only thing in the back of my mind is, do you think there is anyway they can find out about trading I do without clearing it? How could they possibly? Surely not?

    Any thoughts?
  2. You want different rules, seek a different employor.

    It's never a good thing to knowingly violate your rules of employment in the hope that you will not be caught. Getting terminated could be the least of your worries. Worse, it is morally corrupting.

    Author - "These Seven Trading (Investing) Secrets Will Explode Your Account: All I Know About Trading (Investing) I Learned in Flight School"
  3. I will take your comments on board, thanks.
  4. Haha. I wouldnt do it because its "morally corrupting". Most employers, if not every employer, are already morally bankrupt and would turn against you in a second. You can't count on your employer to ever do the right thing and expecting such is just silly.

    The question revolves around "getting caught". In this day in age of computers, there has to be a system that would check your account up against a central repository of data. I dont know anything about what goes on in Britain, but I am sure you had to turn in some identification to the broker, the broker probably is regulated by a central authority and your information would be compared up against whats in the central authority.

    Lets say you could not get caught by electronic means. I am sure that somewhere along the way you would reveal to a co-worker what you are doing and then that co-worker will tell the boss. This is oftentimes the case when you are doing something wrong. If you choose to do something wrong, then do not trust anyone at work even people you consider to be "friends". I would also not tell loved ones or anyone outside of work either because they can sometimes tell the wrong people. Just keep it to yourself and tell no one.

    So in short, they can probably find out someway electronically. If they dont find out electronically, then someone will tell them when one day you accidentally reveal it to someone you shouldnt have.
  5. Perhaps the book of trading rules is one they can show regulators in case something goes down and if something does they can always say 'hey,he broke our rules we had in place.'

    Maybe they expect the traders to ignore some of the handcuffs and they are only there in an attempt to protect the firm in case something happens.

    Or maybe I don't know what the f@!k I'm talking about.
  6. Hmm. I wonder if it a generational thing.

    An immoral world is no justification for being immoral yourself. That's my story and I'm sticking to it.

    Author - "These Seven Trading (Investing) Secrets Will Explode Your Account: All I Know About Trading (Investing) I Learned in Flight School"
  7. Thanks for the responses guys, all valid points.

    I guess it comes down to the fact that yes they could probably find out I have an account with a broker, but do they really care or are the rules just to cover themselves in the case of some insider trading scandal, and then do I want to take the risk.

    Would be interesting to find somebody who has been busted for unauthorised trades.
  8. I was going to say checking me against a database seems a bit drachonian, but then I wouldn't put it passed them, in fact they are probably reading this thread right now.
  9. How do you think all the "insider trading" cases are made. It's done all the time. The focus is on big money, but do you know where the bar is set so you can stay under the radar. (How's that for a mixed metaphor?)

    Author - "These Seven Trading (Investing) Secrets Will Explode Your Account: All I Know About Trading (Investing) I Learned in Flight School"
  10. I forgot to add the moral implications in my summary of the issue.

    I am pretty sure I am under the radar, no doubt about that one.

    Actually the rules with the stop distances and minimum holding periods seem to be designed to discourage short term speculation, so maybe its also to do with them not wanting gamblers working for them and not wanting their staff using too much of their energy on their personal trading and not focusing 100% on their careers.
    #10     Nov 4, 2010