What is the definition of 'insider trading'?

Insider trading refers specifically to the practice of buying or selling stocks or other securities based on non-public, confidential information about a company. This activity is considered illegal because it gives an unfair advantage to those who possess insider knowledge over ordinary investors who do not have access to that information. The intent behind these regulations is to maintain market integrity and ensure a level playing field for all investors.

The other options do not accurately capture the essence of insider trading. Trading based on public information is completely legal and part of normal market practices. Buying stocks during market hours doesn’t inherently involve any misuse of information. Engaging in stock market speculation could involve various strategies and does not necessarily involve inside knowledge or breach of legality.