Company insiders report their trades on SEC Form 4, generally within two business days. There are a lot of them, and most are routine: scheduled sales, option exercises, tax withholding. The skill is separating the few buys that say something from the many that say nothing.
Start with buys, not sells
Insiders sell for reasons that often have nothing to do with the company: a house, a divorce, diversification, a preset 10b5-1 plan. Buys are simpler to read. An insider spends their own money on the open market when they think the stock is worth more than its price, which is why open-market purchases get more attention than sales.
Look for clusters, not lone trades
One director buying a small amount is weak evidence. Several insiders buying around the same time is stronger, because it is harder to explain a cluster as one person’s personal situation. Clustered buying by people who rarely buy is the pattern worth noticing.
Weigh the person and the size
A CFO buying a meaningful amount carries more information than a board member topping up a tiny position. Size relative to the insider’s existing holdings matters, and so does their role. A purchase that is large for that specific person is more telling than a round number that looks big but is routine for them.
Check the form, not the rumor
An intent to sell shows up first on a Form 144, which is a notice rather than a completed trade. The actual transaction lands on a Form 4. If you are reacting to insider activity, read the filing itself instead of a secondhand summary, because the details (the transaction code and the remaining holdings) change the meaning.
How QuantConomy handles this
We read Form 4s as they post, link each one to the issuer and the insider, and raise a signal with a direction and strength so a cluster of meaningful buys rises to the top on its own. The filing stays attached, so you can open the source and judge it yourself. The point is not to act on every insider trade. It is to never miss the handful that matter.