How to Track Insider Trading with SEC Form 4 Alerts

Discover how real-time insider trading notifications help investors identify profitable opportunities before the market reacts

1

What Are SEC Form 4 Insider Trading Filings?

SEC Form 4 is a mandatory filing that corporate insiders must submit within 2 business days of buying or selling company stock. It's one of the most transparent windows into what company leaders really think about their stock's future.

Who Must File?

  • Directors and Board Members
  • Executive Officers (CEO, CFO, COO, etc.)
  • 10% Shareholders (beneficial owners)
  • Certain beneficial owners

What Triggers Filing?

  • Stock purchases in open market
  • Stock sales or disposals
  • Stock option exercises
  • Gifts and transfers of shares
Key Timing Rule: Insiders must file within 2 business days of the transaction. This creates a narrow window for investors to act on insider activity before the market fully reacts.
2

How to Read Insider Trades

Not all insider transactions are created equal. Understanding transaction codes and patterns helps you identify the most meaningful signals.

With real-time insider trading alerts from Avant Insider, you can automatically filter these signals based on your specific criteria.

Common Transaction Codes

P
Purchase
Open market buy - strongest bullish signal
S
Sale
Open market sell - can have many reasons
M
Exercise
Option exercise - often neutral
A
Grant
Stock award/grant - routine compensation

Example: Decoding a Real Form 4

Form 4 Filing Example
Company:
Apple Inc. (AAPL)
Insider:
Timothy D. Cook - Chief Executive Officer
Transaction:
Purchase (Code P)
Shares:
50,000 shares
Price:
$170.00 per share
Total Value:
$8,500,000
What This Tells Us: When a CEO personally invests $8.5M of their own money, it's a strong bullish signal. They have access to information we don't, and they're betting the stock will go up.

Key Patterns to Watch

  • Cluster Buying: Multiple insiders buying within days = strongest signal
  • Large Purchases: Transactions over $1M show serious conviction
  • Timing: Buying after stock drops suggests insiders see value
  • CEO/CFO Activity: Top executives have the best information
  • Unusual Activity: First purchase in years can be significant
3

Why Insider Trading Matters

Academic research and legendary investors agree: insider buying is one of the most reliable indicators of future stock performance.

"Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise."
— Peter Lynch, Legendary Fidelity Fund Manager

The Information Advantage

  • Inside Knowledge: Executives know upcoming products, earnings, and strategic plans
  • Personal Risk: They're putting their own money on the line, not just opinions
  • Legal Constraints: Insiders face severe penalties for illegal trading, so filings are credible
  • Proven Track Record: Studies show insider purchases outperform the market over time

Your Edge: Complete Coverage

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Missed by terminal solutions
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Missed by email services
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Our coverage rate
Real-Time Matters: The market reacts quickly to insider activity. Getting alerts in seconds instead of hours or days can mean the difference between catching a move and missing it entirely.

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