Some kinds of insider trading are perfectly legal – and they offer useful signals about a company’s health

According to Lee Biggerstaff, a finance professor at Miami University, some forms of insider trading are perfectly legal — and they offer a surprisingly useful window into whether a company really believes in its own future. When corporate executives buy or sell their own company stock, those transactions are publicly disclosed, and they can signal something crucial: whether leadership genuinely expects the business to recover from a downsizing. During layoffs, confusion reigns about what comes next. But if you're watching executives put their own money into stock, you're seeing whether they actually have confidence in a turnaround. It's a transparent signal embedded in their personal choices.

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