I.7 Information Information is critical to the operation of capital markets. Prices respond to the arrival of new information. Examples of public information are regularly scheduled macro economic news announcements. A summary of the scheduled announcements for the week and the market forecasts appears on page 2 of the Wall Street Journal. Most in finance track these important macroeconomic announcements.
Private information is more difficult to pin down.
It is usually revealed by trading activity. For example, an investor with negative information about a firm's prospects might sell a large block of stock. When the market observes the size of the block and the price drop, they will infer this negative news. However, the private information trader will act strategically. It is unlikely that she will dump all the stock in one block.