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Abstract. Due to the influence on the financial business field, insider trading has widely been paid attention on at home and abroad. This paper summarizes the development of the insider trading model domestic and overseas and the progress of the research of insider trading at home. Meanwhile, this paper puts forward a model, which is called benchmark model, which combines the real sector with financial markets to study insider trading. By using Bayesian Nash equilibrium solution, we can solve the benchmark model and then study the influence on insider trading caused by the financial markets. Therefore, the establishment of this model in this paper provides a strong basis for studying the relationship between the equity incentive contract and insider trading in the financial markets.