Long time ago I think in 2010-2011, a British Company named British Petroleum (BP) was doing very well and the share price of the company was above £5 for 1 share. Then there was a BIG news that BP had spilled oil and will be penalised heavily. Whether the event actually happened or was it a BIG news by the brokers sitting in the London Stock Exchange, I don’t know…Anyway the price of BP went down considerably as low as £2 per share. A massive drop of £3 per share. I asked a broker of London Stock Exchange why BP price is going down? He said because of the oil spill. I said so what? But he kept saying oh you don’t know I have the insider news that to sell BP Shares. I asked how did you get the news and from whom? He said I have my sources in BP. I said then could you please introduce those people to me so that I will also take informed decisions. He said NO because they are my friends. I said oh ok. Then he said don’t worry just do as I say. I said okay but I didn’t trade because what is this? A broker knows a news from within a company? So this is cheating, isn’t it? That means it may be possible that there was no spill of oil after all? or it may be possible that people inside BP making up news to get some money? The news of oil spill by BP came way too late on the BBC?
Which is true? But why this news plays so much havoc on investors? I don’t understand these London Stock Exchange brokers, do anyone of you?
The only thing I know they get huge pay checks and commissions. That’s it…