Reference
Glossary
The terms you meet in insider filings and on this site, each defined in a sentence first and then explained, with the questions people ask and the primary sources.
- Form 4
- Form 4 is the SEC filing an officer, director or holder of more than 10% of a company’s shares must submit within two business days of buying or selling that company’s securities. It is the primary public record of insider trading in the United States.
- Read the full entry
- Form 144
- Form 144 is the notice an affiliate of a company must file with the SEC before selling restricted or control stock when the sale exceeds 5,000 shares or $50,000 in any three-month period. It announces an intended sale; the sale itself is later reported on a Form 4.
- Read the full entry
- Rule 10b5-1 trading plan
- A Rule 10b5-1 plan is a written, pre-arranged schedule for buying or selling a company’s stock that an insider adopts while not aware of material non-public information. Trades made under the plan carry an affirmative defence against insider trading charges, and since 2023 they are flagged on Form 4.
- Read the full entry
- STOCK Act
- The STOCK Act (Stop Trading on Congressional Knowledge Act of 2012) requires members of Congress and senior staff to report securities transactions over $1,000 within 30 days of being notified of them and no later than 45 days after the trade, and confirms that they are subject to insider trading law.
- Read the full entry
- Cluster buying
- Cluster buying is two or more insiders of the same company buying its stock on the open market within a short window, typically a few weeks. Several independent decisions to buy carry more information than one, which is why it is tracked separately.
- Read the full entry
- Conviction score
- The conviction score is InsiderTell’s 0 to 100 rating of an insider’s open-market purchase, summed from published components: the insider’s role, the size of the trade in dollars and relative to their holdings, the price against the 52-week range, cluster buying, repeat buying, the insider’s track record, and deductions for scheduled or token trades.
- Read the full entry
- Insider trading (legal and illegal)
- Insider trading is trading in a company’s securities by its officers, directors and large shareholders. It is legal when reported on Form 4 and not based on material non-public information, and illegal when it uses such information in breach of a duty. Form 4 filings record the legal kind.
- Read the full entry
- Open-market purchase (transaction code P)
- An open-market purchase is an insider buying their company’s shares with their own money at the market price, reported on Form 4 with transaction code P. It is the one insider transaction that costs the insider money, which is why studies of insider trading and InsiderTell’s scores rest on it.
- Read the full entry
- Excess return
- Excess return is a stock’s return over a period minus the return of a benchmark, here the S&P 500 (SPY), over the same dates. It is how InsiderTell measures what happened after a filing, so a rising market is not credited to the insider.
- Read the full entry
Not investment advice. Scores and forward returns are decision support built from public SEC filings and past prices; they describe what happened after comparable filings, not what will happen after this one. Do your own research and size your risk.