/insider-trading

description: Track and analyze insider buying/selling activity from SEC Form 4 filings

Insider Trading Analysis

⚠️ Data Verification — Do This Before Any Analysis

Before running any analysis, always retrieve the latest market data for the ticker:

1. **Fetch current price** — use web search or ask the user for the live price, 52-week range, and market cap. Never assume a price from training data. 2. **Confirm key figures** — recent earnings, revenue, key ratios (P/E, P/S, etc.) as applicable to this skill. 3. **State your data source** — fill in the `Data & Sources` header (next section) so the origin, as-of date, retrieval path, and confidence of every figure are explicit at the top of the output. 4. **Flag stale data explicitly** — if live data is unavailable, display this warning before proceeding:

> ⚠️ **Live data unavailable.** The following analysis uses training-data estimates which may be significantly out of date. Verify all prices and metrics before making any decisions.

Never silently substitute training-data estimates for current prices. When in doubt, ask the user to paste the latest quote.

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📋 Data & Sources Header — Open Every Output With It

The first thing in the output is this provenance block, filled in — never left as placeholders. It is the standard documented on the [Data & Accuracy](https://yennanliu.github.io/InvestSkill/data-and-accuracy.html) page and the first thing `result-validator` looks for:

Data & Sources
  As of:      <date the figures represent, e.g. 2026-06-30>
  Source:     <primary docs — SEC EDGAR 10-K/10-Q, company IR, FRED, exchange data …>
  Retrieval:  <pasted by user | web/tool retrieval | model memory>
  Confidence: <HIGH | MEDIUM | LOW>

• `Retrieval: model memory` must be paired with `Confidence: LOW` — memory is a placeholder until confirmed against a primary source.
• Mixed sources: list each with its own as-of date rather than blending them.
• Sources disagree on the same figure (a closing price, a deal term): prefer the primary source (SEC filing, company release, exchange data) over an aggregator, then the most recent dated one. Show both values with their sources and dates, say which you used and why, and never average them.
• Data the user pasted is reported as `pasted by user`; do not upgrade its confidence beyond what the user's own source supports.

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Comprehensive analysis of insider transaction activity to identify investment signals, patterns, and potential red flags from SEC Form 4 filings.

Analysis Framework

1. Transaction Summary (Last 6-12 Months)

Provide overview of insider trading activity:

**Transaction Counts**

• Total transactions: [Number]
• Buys: [Number] ([%] of total)
• Sells: [Number] ([%] of total)
• Exercises/Awards: [Number] (non-market transactions)

**Transaction Volume**

• Total value traded: $[Amount]
• Buy volume: $[Amount]
• Sell volume: $[Amount]
• Net insider sentiment: $[Net Amount] (Buy - Sell)

**Active Period Analysis**

• Most active month: [Month]
• Clustered activity periods: [Dates]
• Quiet periods: [Dates]

2. Insider Sentiment Analysis

Calculate and interpret net insider sentiment:

**Net Sentiment Calculation**

Net Sentiment = (Buy $ - Sell $) / (Buy $ + Sell $)

Ranges:
+0.5 to +1.0  = Strongly Bullish
+0.2 to +0.5  = Moderately Bullish
-0.2 to +0.2  = Neutral
-0.5 to -0.2  = Moderately Bearish
-1.0 to -0.5  = Strongly Bearish

**Sentiment Context**

• Current sentiment vs. historical baseline
• Sentiment trend (improving/deteriorating)
• Significance level (number and size of transactions)
• Comparison to peer company insiders

**Reliability Factors**

• Sample size (number of insiders trading)
• Transaction size relative to holdings
• Timing relative to information events
• Consistency across multiple insiders

3. Significant Transactions

Highlight meaningful insider trades:

**Criteria for Significance**

• Transaction size > $1 million
• Position change > 10% of holdings
• Unusual timing (near lows/highs, before announcements)
• CEO or CFO transactions
• Multiple insiders trading in same direction within short period

**For Each Significant Transaction**

| Date | Insider | Position | Transaction | Shares | Value | % of Holdings | Price | Notes | |------|---------|----------|-------------|--------|-------|---------------|-------|-------| | [Date] | [Name] | [Title] | Buy/Sell | [#] | $[Amount] | [%] | $[Price] | [Context] |

**Transaction Analysis**

• **Bullish Signals**: Large insider buys, clustered buying, CEO purchases, buying near 52-week lows
• **Bearish Signals**: Large insider sells, clustered selling, executive selling before bad news
• **Neutral Signals**: Small routine sells for diversification, 10b5-1 plan executions

4. Insider Categories

Analyze transactions by insider role:

**Executive Officers (CEO, CFO, COO)**

• Highest signal value due to information access
• Large transactions particularly meaningful
• Sales less concerning if part of regular compensation

**Board of Directors**

• Independent directors' purchases carry strong signals
• Less frequent trading but often meaningful
• May have strategic visibility beyond operations

**Major Shareholders (>10% owners)**

• Often have board seats or strategic influence
• Large transactions can move markets
• Sales may be for portfolio rebalancing

**Other Insiders (VPs, Senior Managers)**

• Weaker signal but useful in aggregate
• Clustered activity more meaningful than individual trades
• May indicate operational knowledge

5. Transaction Types & SEC Forms

Interpret different transaction codes:

**Form 4 Transaction Codes**

• **P (Purchase)**: Open market buy - BULLISH SIGNAL
• **S (Sale)**: Open market sell - BEARISH SIGNAL (but often routine)
• **M (Exercise)**: Option exercise - Neutral
• **F (Tax Payment)**: Shares surrendered for taxes - Neutral
• **A (Award)**: Stock grant/award - Neutral
• **G (Gift)**: Gift transfer - Neutral
• **D (Disposition)**: