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The Discreet Trader, Seth Wing

Honors Projects in Finance

This paper examines insider trading, specifically trades by corporate insiders around quarterly earnings announcements. Announcements were broken up into three categories: earnings above analyst expectations, earnings below expectations, and earnings in line with expectations. Trade data was collected from the thirty companies of the Dow Jones Industrial Average from 2012-’13. The trades were sorted by purchases and sales by date and analyzed with the earnings report of which the trades were made. Only trades in the interval from twenty days before the announcement date to twenty days after the announcement date were considered. The prediction was that corporate insiders would …