The former head of the collapsed Tasmanian timber company Gunns has appeared in the Supreme Court as his trial on insider trading charges gets underway.

John Gay did not comment to waiting media outside the court in Launceston where he entered formal pleas of not guilty to two counts of insider trading.

Gay is accused of selling 3.4 million Gunns shares in December 2009, shortly before their value dropped sharply.

It is alleged Gay had access to information not readily available to the public, which a reasonable person would expect to affect the share price.

Gay appeared via video link in the Supreme Court in Hobart, where the prosecution and defence will spend the rest of the day on legal argument.

A jury will be empanelled in Launceston on Monday.

The trial is expected to last for up to five weeks.