How to actually read insider filings
Insiders must report when they buy their own stock — but the raw filings are nearly unreadable. What the codes mean, which signals matter, and which are noise.
When a CEO buys a million dollars of their own stock, that fact is public within days. The catch: regulators publish it in formats designed by lawyers, for lawyers. Here is how to read the signal without drowning in the noise — it is the reason our Insider Tracker exists.
The two systems
United States — SEC Form 4. Filed within two business days of a trade. The field that matters is the transaction code: P means an open-market purchase with the insider's own money — the strongest signal there is. S is an open-market sale. Almost everything else (A, F, M, G) is compensation plumbing: grants, tax withholding, option exercises. Our tracker keeps only P and S; the rest is noise dressed as news.
Canada — SEDI. Same idea, worse website. Filings appear within five days; the equivalent signal is an acquisition in the public market. We import these weekly.
The signals worth watching — in order
- Cluster buys. One director buying can be a mortgage-payment story. Three or more distinct insiders buying the same stock within a week is a pattern — the strongest insider signal in the research, and the tracker flags it automatically.
- Size relative to role. A CEO buying $2M means more than a director buying $20K.
- Who is buying. CFOs see the numbers first. A 10% owner adding is conviction from someone already concentrated.
What to ignore
- Most selling. Insiders sell for houses, taxes, and diversification — weak signal. (Broad, heavy selling by many insiders at once is the exception.)
- Grants and option exercises. Compensation, not conviction.
The filing worth pausing on rarely shouts. It looks like a single Form 4 for $40K — modest by CEO standards — filed by a CFO two weeks after a guidance cut, priced right at the post-drop low, with no 10b5-1 plan attached. Nothing about the dollar figure says "signal"; the transaction code and the timing do. That is the entire skill: reading past the headline number to who is buying, with what money, and when.
Every buy and sell we track is free on the Insider Tracker, cluster detection included — and our own cluster-buy signal is scored publicly on Proof of Signal, because that is how this site works.
Opinion and personal record, not investment advice.