Form 4: when insiders buy or sell

What makes it special

It is almost real time and comes from those who know the company best. Sales have many reasons (taxes, diversification, a house); open-market purchases with their own money usually have just one: they think the stock is cheap.

How we filter it

We only count open-market purchases (code P), excluding options and automatic plans, and highlight when the CEO or CFO buys and when several insiders buy at once.

Source: Form 4 and instructions (SEC, PDF)

Who files it and by when

Form 4 is filed by the officers of a listed company, the members of its board and shareholders with more than 10% of a class of shares. They have two business days from the trade. Before their first trade they file a Form 3, which says how much they held when they took the role, and once a year they may file a Form 5 with anything left unreported. The short deadline is what sets this document apart: while a 13F shows a snapshot that is 45 days old or more, Form 4 arrives almost at once. The SEC accepts them on business days, until 10 p.m. Eastern time.

Table I and Table II

The form has two tables. Table I is for shares and other non-derivative securities: each line carries the trade date, a code, the amount, the price and how many shares the person holds after trading. Table II is for derivatives: options, restricted stock units, rights and convertibles, with their exercise price and dates. One transaction can take lines in both: when an option is exercised, Table II records the option that goes away and Table I the shares that come in. The form also states whether the holding is direct (in the person's name) or indirect (a trust, a company, a relative), with a footnote explaining which.

Transaction codes

The code says what the transaction was, and it changes the reading completely. “P” is a purchase on the market or from a private party, with the person's own money. “S” is a sale. “A” is an award: shares or options the company gave the person as part of their pay. “M” is the exercise of an option. “F” is shares handed back to the company to pay taxes or the exercise price. “G” is a gift. “J” and “K” cover other cases that the footnote has to explain. Only “P” and “S” are decisions to buy or sell at market price; the rest are, almost always, consequences of the pay plan. That is why the purchase lists here count only “P” and leave out awards, employee purchase plans and exercises.

Footnotes and 10b5-1 plans

Much of the information is in the footnotes. They clarify whether a sale was made to pay the taxes on shares that vested, whether the reported price is an average of several trades that day, or whether the trade was made under a 10b5-1 plan. Such a plan is a programme of purchases or sales that the person sets in advance, when they hold no confidential information, and that then runs by itself on the agreed dates. Since 2023 the form has a box to flag it. A sale under a plan says little about what the person thinks today: the decision was made months earlier. When the title field says “See Remarks”, the actual title is written in the remarks at the end.

Amendments and data-entry errors

A Form 4 is corrected with a Form 4/A, which replaces the original. If both are counted, the same trade shows up twice. The most common errors are data-entry ones: the total price in the price-per-share field, the amount in thousands, one share class for another in companies that have two (a Berkshire class A share is worth 1,500 times a class B share), or a purchase of shares entered in the derivatives table. Some forms are also filed late, occasionally by years. So a figure that looks extraordinary, such as a purchase of hundreds of millions by a director, is worth checking against the original document before believing it.

How they are read here, almost in real time

While the SEC is accepting filings, the site checks the list of the latest Form 4s every five minutes and reads the new ones. From each document only open-market purchases and sales are taken (codes “P” and “S”), the lines of the same person on the same day are added up and the link to the original is kept. Each row shows the trade date and the filing date separately; they can differ by two days, or by much more if the form came in late. A 4/A replaces the form it corrects. Trades under a 10b5-1 plan and sales made to pay taxes are flagged. When a group of related persons reports the same purchase on several forms, it is counted once. Times are shown in Eastern time, which is the one EDGAR uses.