Insider Trading & Form 4, Explained

When a company’s executives, directors, or large (10%+) owners buy or sell its stock, they must report it to the SEC on a Form 4, usually within two business days. This is legal insider activity — fully disclosed, public record.

(That’s different from illegal insider trading, which is dealing on secret, market-moving information.)

What the codes mean

Each transaction has a code. The common ones:

• P — Buy: an open-market purchase. Often the most meaningful signal — insiders buy for one reason: they think the stock will rise.
• S — Sell: an open-market sale. Less telling on its own (insiders sell for taxes, diversifying, a new house…).
• A — Grant / M — Option exercise / F — Tax withheld: compensation-related, usually routine.

How to read it

• Cluster buying (several insiders buying around the same time) is a stronger signal than one purchase.
• Routine selling and option exercises are normal and rarely mean much.

Every Stocktoria company page shows recent Form 4 activity with the insider’s name, role, and the action — straight from SEC filings.