Say what? All you need to know about stock market rumors

What is a rumor? That depends on the context. On Wall Street, a rumor is actionable information of unknown veracity and source. The unknown veracity and source of particular information should, in theory, make that information useless, but on Wall Street, there are rules—laws, in fact—about who gets to tell what to whom and when. Because of these rules, there are some kinds of information that you can only ever get in rumor form.

Some rumors seem to come from out of nowhere, but most arise in response to one of the two great and eternal mysteries of stock trading: Why are shares of XYZ up a noticeable amount today on no news? And… Why are shares of XYZ down a noticeable amount today on no news?

Julian Close

Julian Close

Julian Close became a stockbroker in 1995. In his 20 years of market experience, he has seen all market conditions and written about every aspect of investing. Julian has also written extensively on corporate best practices and even written reports for the United Nations. He graduated from Davidson College in 1993 and received a Master of Arts in Teaching from Mary Baldwin College in 2011. You can see closing trades for all Julian's long and short positions and track his long term performance via twitter: @JulianClose_MIC.

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