What constitutes illegal insider trading?

• A. Making trades public after they occur
• B. Using public information to trade
• C. Trading using confidential, non-public information
• D. Advising others without trading

Answer: (C)

Insider trading is often characterized by the use of confidential, non-public information to make trading decisions. This practice is considered illegal because it undermines the integrity of the securities markets by giving an unfair advantage to individuals who have access to information that could influence a stock's price but is not available to the general public. By trading on this non-public knowledge, insider traders can profit or avoid losses while other investors are unaware of the information that could impact their decisions.

The other options describe legal practices or actions that do not violate insider trading laws. For instance, making trades public after they occur does not involve using confidential information prior to trading. Similarly, using public information to trade is a fundamental right of all market participants and does not contravene any securities regulations. Advising others without trading can also be permissible as long as the advice is based on public information and does not disclose non-public insider information. Therefore, option C accurately identifies the illegal practice of trading on confidential information, distinguishing it from the other scenarios presented.