"Rat Trading" means that in stocks, futures or other financial markets, some people use their inside information, advantageous position or illegal means to obtain certain information in advance, and then buy or sell in large quantities before the information is made public. The act of selling relevant securities to obtain illegal benefits.
Before using public funds to raise the stock price, market makers first use their own (institution leaders, traders, their relatives, and related households) funds to build positions at low prices. After using public funds to raise the stock price to high levels, the market makers take the lead in selling their personal positions to make a profit.
Specifically, "rat positions" often occur when some people, after knowing about important news, financial reports or other information that will affect the market, use their advantageous position or channels to conduct a large number of transactions before the information is made public in order to seek unfair gains. Interests. This behavior not only damages the fairness and transparency of the market, but also weakens the confidence of ordinary investors and seriously affects the stability and healthy development of the market.
Therefore, financial regulatory agencies in most countries and regions have strictly supervised and cracked down on "rat warehouse" behavior to maintain market order and fairness. These regulations include measures such as severe penalties for insider trading, strengthening the information disclosure system, and strengthening the supervisory capabilities of regulatory authorities.
