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By Options AI Screener · Last updated 2026-10-12 · 8 min read
Corporate insider filings are the best-structured dataset in this corner of the market. They arrive in two business days, they state exact share counts at exact prices, and the people filing them know the business better than anyone reading about it. That combination makes insider buying worth tracking, and it also makes it easy to over-read, because the form reports a transaction without reporting a reason.
Officers, directors and holders of more than 10% of a company's stock file a Form 4 with the SEC within two business days of transacting in that company's securities.
Each line carries the transaction date, a transaction code, the number of shares, the price, and the holding remaining afterwards. Compared with a congressional periodic transaction report — up to 45 days late, amounts in brackets — it is a better dataset on both of the dimensions that decide whether data is usable. Tracking congressional trades covers that comparison from the other side.
The transaction code is the field most people skip, and it is the one that separates signal from paperwork.
| Code | What it is | Information content |
|---|---|---|
| P | Open-market purchase | The one that matters |
| S | Open-market sale | Weak, for the reasons below |
| M | Option or derivative exercise | A compensation event, not a decision |
| A | Grant or award | Nothing; the company gave it to them |
| F | Shares withheld to pay tax | Nothing; it is a withholding mechanic |
A screen that counts dollars without reading the code will report grants and exercises as insider buying. That is the single most common way this data is misused, and it inflates the apparent volume of buying enormously.
The usual formulation is that insiders sell for many reasons and buy for one. It is a cliché, and it is also correct.
An insider's financial life is already concentrated in their employer: salary, bonus, unvested equity, options, and in many cases most of their net worth. Selling reduces a concentration that any adviser would tell them to reduce. It may be funding a house, a divorce, a tax bill, or simply a scheduled diversification. None of that is a view on the stock.
Buying moves in the opposite direction. It takes an exposure that is already undiversified and makes it larger, with money that has already been taxed. That is a hard decision to explain except by expecting the shares to be worth more. It is not proof — insiders are wrong regularly, and can be early by a year — but the asymmetry is real and it is why buy-side filings deserve the attention.
The option exercise. Code M, often paired with an immediate code S sale. The insider exercised options they were granted years ago and sold the shares. It appears in a dollar-weighted buy count as a large purchase. It is a compensation event.
The 10b5-1 plan purchase. A pre-arranged schedule, decided months earlier, executing on its own calendar. The filing normally carries a footnote naming the plan. A plan transaction tells you what someone decided last year, not what they think now.
The 10% holder. Private equity funds, founders' trusts and large asset managers file Form 4 once they cross 10%. Their buying and selling follows fund mechanics, lock-ups and mandates. It is the least informative category on the form and often the largest by dollars.
The small director purchase. A non-executive director buying $25,000 of stock may be signalling confidence, or may be meeting a share-ownership guideline the board itself set. Both produce an identical filing.
Three readings survive the filters above.
Size relative to that person's own compensation. A $500,000 purchase by a CEO paid $12 million is routine. A $500,000 purchase by a CFO paid $900,000 is a different act entirely. The dollar amount alone ranks the first one higher; the ratio ranks the second one higher, and the ratio is the one that reflects a decision.
Cluster buying. Several officers and directors making open-market purchases independently within a few weeks is the pattern with the most support behind it, and it is uncommon. It is harder to explain through plans, guidelines or personal circumstance than any single filing.
A first purchase after a long absence. An executive whose filing history is years of code A grants and code S sales, suddenly buying on the open market, has changed behaviour. The change is the observation, not the amount.
Notice what these have in common with the usable patterns in congressional data: each compares a filing against a baseline rather than reading a number in isolation.
Insiders know their company. They do not reliably know what the market will pay for it next quarter.
An executive who understands the product roadmap in detail is still guessing about multiples, rates and sentiment, and those often dominate a twelve-month return. Insider buying into a falling stock is common, and is frequently early — sometimes by enough that the position is well underwater before it is right.
So the honest framing is narrow: a cluster of open-market purchases, large relative to the buyers' own pay, is a reason to look closely at a company. It is not a timing signal, and it is not a substitute for deciding whether you want to own the business at the current price.
The Insider Buying tracker shows filings with transaction values and filing dates, so the gap between the transaction and the disclosure stays visible. Reading it alongside the Congress Trades tracker is useful mainly because the two datasets fail in different ways: one is precise and fast but concentrated in a few people per company, the other is broad but late and vague.
Neither is advice about a specific position. The habit worth building is reading the transaction code before the dollar amount, because the dollar amount is what every headline quotes and the code is what tells you whether anyone decided anything.
A filing that officers, directors and holders of more than 10 percent of a company's stock must submit to the SEC within two business days of a transaction in that company's securities. It states the transaction date, the transaction code, the exact number of shares, the price, and the holding that remains afterwards.
Because the two actions are not symmetric. An insider who buys has chosen to increase an exposure that is already concentrated in their employer, which is hard to explain except by expecting a gain. An insider who sells may be paying a tax bill, diversifying, funding a purchase, or following a pre-set schedule. The sell carries far less information for the same dollar amount.
A pre-arranged schedule that lets an insider trade at set intervals without being deemed to act on inside information. Transactions executed under a plan were decided months earlier, so they say nothing about current expectations. Filings normally carry a footnote identifying the plan, and that footnote is the difference between a decision and a calendar entry.
No. It is one observation about what someone with better information chose to do with their own money, and it is made against a position that is already undiversified. Insiders are wrong often, they can be early by a long way, and a purchase is not a forecast of a price or a date.