Last updated: 2026-09-05 · See live insider trades →
“Insider trading” has two very different meanings. Illegal insider trading is trading on material, non-public information — a CEO selling shares before announcing bad earnings, for example. This is a federal crime prosecuted by the SEC.
Legal insider trading is what we track: executives, directors, and major shareholders (all classified as “insiders” under SEC rules) are permitted to buy and sell shares in their own company, but they must file a Form 4 with the SEC within two business days of each transaction. These filings are public and searchable on EDGAR.
Open-market purchases (transaction code “P”) are the most meaningful signal. Unlike stock awards or option exercises, open-market buys represent genuine conviction — the insider is spending their own cash to acquire shares at the current market price.
A cluster buying signal occurs when multiple insiders at the same company make open-market purchases within a short window (typically 30 days). Research consistently shows that cluster buys are significantly more predictive than single-insider purchases, with average excess returns of 4–8% in the 6 months following cluster insider buying events.
Insider selling is much less informative than buying. Executives sell shares for many reasons unrelated to company prospects: diversification, tax planning, funding home purchases, exercise of vested options. Cluster sells — multiple insiders selling simultaneously in large quantities — are more concerning and worth monitoring alongside other distress signals.
Advantage Intel scans all Form 4 filings daily, identifies cluster buy and sell events,
and scores them alongside distress signals for cross-signal intelligence.
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Form 4 must be filed with the SEC within two business days of any insider buying or selling shares. It discloses the transaction type, date, price, shares, and remaining holdings.
Multiple insiders buying shares at the same company within a short window (30 days). Academic research shows cluster buys produce average excess returns of 4–8% over 6 months — much stronger than single-insider buys.
Open-market purchases (code P) are considered the most bullish insider signal because they represent real cash conviction, not stock grants. Cluster purchases amplify the signal significantly.