4 major harms of rat trading to investors:

1. Increased investment risks

Rat trading may increase investors' risk exposure. When investors make decisions without sufficient information or are misled to believe false market conditions, they may make wrong investment choices leading to losses.

2. Damage to investor interests

Rat trading may harm investors' interests. When a few individuals use undisclosed information or abuse power to manipulate stock prices, other investors may suffer losses due to lack of the same trading advantages. This violates fair competition principles and harms the interests of general investors.

3. Loss of confidence

Rat trading negatively impacts investor confidence. When investors become aware of unfair trading practices in the market, they may lose faith in the market and doubt its stability and reliability. This may lead to capital withdrawal or reduced participation in the stock market, affecting market liquidity and efficiency.

4. Market unfairness

Rat trading undermines market fairness. A few individuals gain unfair trading advantages through improper means like obtaining undisclosed information or abusing authority. This puts other investors at a disadvantage, depriving them of equal trading opportunities and creating an unfair competitive environment.