Insider information is material nonpublic information about an event a contract is written on, held by someone through a special position or duty rather than from public sources.
Last reviewed 3 December 2025 · Educational, not advice
Insider information, in the context of event contracts, is material nonpublic information about the outcome a contract depends on, held by a person because of a special position, role, or duty rather than from public sources. Two parts matter. Material means the information could affect the outcome or move the price if it were known. Nonpublic means it has not been released to the market generally. Someone who knows a result, a decision, or a figure before it is announced, because of where they sit or what they were entrusted with, holds insider information about that event.
It helps to separate this clearly from ordinary research, because the two can look similar from the outside. Doing your own analysis, reading public reports, following the news, and forming a view from information anyone could access is normal and expected. That is how markets aggregate opinion. Insider information is different because it is not available to the market and is held privately through a special relationship or duty. The line is not how clever the insight is, but whether the underlying information is public or has been obtained through a position of access or trust.
Trading on insider information is frequently restricted. Many platforms prohibit trading on material nonpublic information in their own rules, and depending on the contract, the venue, and the jurisdiction, laws against fraud, manipulation, or insider dealing can also apply. The exact position varies a great deal and is sometimes unclear, because event contracts sit across different legal frameworks and the rules continue to develop. We will not state a blanket legal rule here, because that would risk being wrong for your situation. The honest summary is that it is often against platform rules, can be unlawful, and should never be assumed to be permitted.
The consequences are real and worth taking seriously. Depending on the venue and jurisdiction, they can include account closure, forfeited funds, regulatory action, or legal liability. Beyond the personal risk, insider trading undermines the fairness that makes a market useful, which is why venues and regulators police it. We explain the concept so you can recognise it. We do not advise on specific cases, and if you suspect that information you hold might be nonpublic or privileged, the right response is to treat it as a reason to seek qualified legal guidance, not as an opportunity to trade.
Suppose a contract is written on whether an organisation will make a particular announcement by a set date. A member of the public who reads the news and forms a view is doing research. A person inside that organisation who already knows the decision, before it is public, holds insider information. If that person trades the contract on what they know, they may be breaking the platform rules and possibly the law, regardless of how confident they feel.
Illustrative only. This is a general example, not legal advice or a statement about any real situation.
Trading on nonpublic information can break platform rules and may be unlawful, with serious consequences. This page is not legal advice, and the rules vary by venue and place. Prediction markets can lose you money. Stake only what you can afford to lose, never to chase a loss, and never on borrowed money. If it stops feeling like a free choice, step back. In the United States you can call or text the helpline on 1-800-GAMBLER or visit ncpgambling.org.
In this context, insider information is material nonpublic information about an event a contract is written on, held by someone through a special position, role, or duty rather than from public sources. Material means it could affect the outcome or the price, and nonpublic means it has not been released to everyone.
Often no. Many platforms prohibit trading on material nonpublic information in their rules, and in some cases laws against fraud, manipulation, or insider dealing can apply depending on the contract, the venue, and the jurisdiction. The position varies and can be unclear, so check the platform rules and the current law for your situation.
Research uses public information and your own analysis, which is normal and expected. Insider information is nonpublic and obtained through a special position or duty. The line is whether the information is available to the market or held privately because of who you are or what you were entrusted with.
Consequences can include account closure, forfeited funds, regulatory action, or legal liability, depending on the venue and jurisdiction. We do not advise on specific cases. If you think information you hold might be nonpublic or privileged, treat that as a reason to seek qualified legal guidance, not a trading opportunity.
The rules change fast. Get the changes that affect you, plain and current, not tips.
Independent. Every claim dated and sourced. No platform pays for its place.