Who is an insider?

An insider typically refers to company executives and board members. In the United States and Canada, shareholders owning over 10% of voting shares also qualify as insiders, including venture capital firms and investment companies like Berkshire Hathaway. Insider trading encompasses these insiders’ stock buying and selling activities.

Following Insider Buying

Insider buying signals confidence, as insiders typically don’t purchase shares when expecting price declines. When multiple insiders buy company stock, it warrants attention.

Following Insider Selling

Insider selling patterns can provide valuable trading insights. Studies show that clustered transactions often yield reliable trading signals.

Key Insider Trading Patterns to Watch

1. Insider buying carries more weight than selling, as buying typically indicates profit expectation while selling can occur for various reasons.

Example: [Insider Buying] SNDA / Sonida Senior Living, Inc.
Sam Levinson purchased approximately 1.05 million shares on February 1, 2024. Following investment funding news, the stock price rose significantly during February-March.

2. Executive transactions hold greater significance due to their access to critical information.

3. Small company insider trading often provides more profitable signals due to limited public information.

4. Clustered transactions offer more reliable signals than individual trades.

Example: [Cluster Selling] AMR / Alpha Metallurgical Resources Inc.
Clustered insider selling occurred from late February to early March 2024. Following executive changes and the selling pattern, the stock price declined significantly.

How to Find Insider Trading Information

While Form 4 filings can be monitored on the SEC website, this process can be time-consuming. Waiker’s insider trading data API or widget offers a more efficient tracking solution.