Insider buying (Form 4)
When officers and directors buy with their own money.
Company insiders must report their trades to the SEC on Form 4 within two business days. These filings are public and a useful read on conviction.
Buys vs. sells
Open-market purchases (transaction code 'P') are the strongest signal — an insider choosing to risk personal cash. Sales are noisier: insiders sell for taxes, diversification, or scheduled plans, so they say less.
What strengthens the signal
- Cluster buys — several insiders buying around the same time.
- Buys ahead of a known catalyst.
- Watch out: some 'purchases' are actually financing-round participations, not open-market conviction.
Educational only — not financial advice.