Markets & Filings
Form 4
The near-real-time disclosure of insider stock buys and sells by executives, directors, and big holders.
Also known as: Insider Transaction, Section 16 Filing
- What it is
- A Form 4 reports transactions in a company's stock by insiders, officers, directors, and 10% owners, generally within two business days. It shows shares bought or sold, price, and remaining holdings. It is a Section 16 requirement.
- How it moves markets
- Insider buying, especially open-market purchases by executives, is watched as a conviction signal, while clustered selling can flag concern. Investors screen Form 4s for meaningful, non-routine trades. Context (10b5-1 plans, option exercises) matters.
- Track record
- Notable open-market insider purchases have preceded stock rallies and are tracked as sentiment signals.
- Who it affects
- Any single name; especially small and mid-caps where insiders own large stakes.
- Related terms
- 8-k, 13f, catalyst
- Common misread
- Sales are often for taxes or diversification under preset plans; reading all selling as bearish misfires.
- Watch out for
- One insider trade is a weak signal on its own and needs corroboration.
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