The Application Of Entropyin Building Construction Security Risk Warning System

Based on information advantage, insider trading is a kind of immoral activity which is conducted by some individuals or institutions, in order to illegally obtain huge profits. Insider trading not only belongs to unfair trading behaviors in the stock market, but also offends the law. Hence it attracts wide attention from jurisprudents and economists from almost every country and China is of no exception. However, the supervision techniques in China are not so advanced and people’s understanding of insider trading is still in a primary step. Therefore, the supervision of insider trading activities, which is extremely obscure, is not of enough efficiency. In this sense, how to enhance the supervision of insider trading appears to be the most important thing in the future. Meanwhile, the way to identify insider trading is the essential factor in the supervision process.The paper initially gives a comprehensive view of the previous researches, both in China and in western countries. Then, the paper examine the insider trading behaviors from a theoretical perspective, in order to find appropriate index which will fit the following empirical analysis. In this research, all the indexes are divided into two types, namely the market performance and the corporate government. Finally, we pick four indexes to testify our model. They are everyday return, everyday turnover, Amivest liquidity ratio and the stock percentage which are hold by the ten biggest shareholders.In the empirical part, the paper choose the Chinese stock market as our sample, collecting fifteen black sample (stocks which have insider trading) and twenty five white sample (stocks which do not have insider trading). Then, we put all data into our Logistic model. The essay also provides the results which are made by SPSS and gives detailed analyses to those results.In the end, based on the present situation of Chinese stock market, the paper offers several ways to prevent insider trading and gives advices for the future development of the supervision system.