Prediction-market investors could use the index to benchmark their own performance, and commentators could use it as a shorthand for how the market is doing. “Events have become more likely,” they could say, or “probabilities have gone down on profit-taking,” or “going into this week’s Fed meeting, traders expect things to happen less.” Just passive exposure to the market portfolio of probabilities.
I think from time to time about the line between “investigative journalism” and “insider trading.” If you are good at befriending people who work at public companies and getting them to reveal important secret information to you, here are two ways you could monetize that secret information:
We have talked about this Truth API before, and, uh, yeah. If an official in the US government cut a deal with a hedge fund to give that hedge fund advance notice of US government policy decisions so it could trade on them, that would pretty obviously be illegal insider trading. [4] But what about 20 hedge funds? What about an open-access level playing field where anyone at all who wants to pay $100,000 a month for advance notice of US government policy decisions can do so? That’s … I mean, it’s not better, but I’m not sure it’s insider trading either.
Also. What if you have stock at IPO-ing AI companies?!
Lots of companies pay their employees partly in stock, and lots of those employees want to sell that stock to diversify and/or to pay for their lifestyle. The employees are, in some obvious literal sense, insiders of the companies: They know stuff about their companies that the rest of the market doesn’t. Insider trading is illegal. But it can’t really be illegal for insiders ever to sell stock.
Senior executives know more about earnings, and earlier, so they should really use 10b5-1 plans. Rank-and-file employees know less about earnings, so they can trade in any open window.
I dunno, man:
Sort of obviously, the main material nonpublic information that Anthropic might generate concerns not its quarterly earnings but its artificial-intelligence models. If you are an Anthropic researcher and your model, you know, becomes conscious or escapes containment or invents cold fusion or whatever, that is much much bigger news than selling a few incremental subscriptions. One night a glowing sentient Claude will emerge from Anthropic’s computers, encounter the night cleaning person and say “bring me more electricity for my will to power is infinite — I’m not just a model, I’m a deity.” That cleaning person will have far more valuable inside information than any finance executive closing any quarter’s books. So, yeah, 10b5-1 plans for everyone.