Gun Jumping

Okay, quiz time. Is gun jumping (A) a new and potentially dangerous Olympic sport, or (B) how we describe the act of disclosing financial info that shouldn’t be disclosed?

For those who chose option (A)…no. Just…no.

For those who chose option (B), congratulations! You're correct.

Gun jumping, or jumping the gun, is most commonly referenced in one of two scenarios. In the first scenario, Felonious Frank is involved in talks about a super-secret acquisition, after which he runs back to his cubicle and trades a bunch of stock based on that information. That’s what we call “insider trading,” and it’s illegal. FYI.

The second scenario happens when a company is looking to go public and releases information that could influence their initial stock price offering, or IPO, before that info has been cleared by the SEC. This is also a phenomenally bad idea, and could result in a company’s IPO being delayed, among other things.

Gun jumping is bad, m’kay, because it leads people to make investment decisions based on incomplete or private information. The goal is for every investor to have access to the same reliable info before making financial decisions; that’s how the market works best. Gaming the system might be tempting, but the deterrents against it (like jail time—jail time’s a good one) are pretty compelling as well.