Documentation · Reference
From what legal insider trading is and the decade-long statistical evidence behind it, to insider roles, SEC Form 4 mechanics, and UK FCA disclosures — everything explained in one place.
The term "insider trading" carries a stigma — most people picture a hedge fund manager on a phone in a parking garage. But that is only half the picture. There are two completely distinct kinds of insider trading, and only one of them is a crime.
Trading on material non-public information — for example, learning about an unannounced merger from a board member and buying shares before the announcement. This is a federal crime under SEC Rule 10b-5, punishable by fines and prison.
Corporate officers, directors, and large shareholders trading their own company's stock — and publicly disclosing every trade within 2 business days via SEC Form 4. This is entirely legal, mandatory, and the data is free and public.
Section 16 of the Securities Exchange Act of 1934 requires every corporate officer, director, and beneficial owner of more than 10% of a company's equity to publicly disclose their trades. The Sarbanes-Oxley Act of 2002 tightened this further — reducing the reporting window from 10 days to 2 business days.
The result: every time a CEO buys $500,000 of their own company's stock, that transaction is on the SEC's public EDGAR database within 48 hours. D-Insider captures that signal as it arrives and surfaces it to you in real time — stripped of the 90%+ of filings that carry no predictive value.
Following corporate insiders has been studied by academic researchers for decades. The evidence is consistent: open-market insider purchases generate significant abnormal returns. This is not speculation — it is a pattern documented across peer-reviewed research spanning 50+ years.
Insider purchases outperform the market by ~11.2% annually on a risk-adjusted basis, after accounting for size, book-to-market, and momentum factors.
Large-cap insider purchases generate ~+8.9% abnormal return over a 6-month horizon. The effect is even stronger for small-cap stocks where information asymmetry is higher.
Distinguishing "routine" from "opportunistic" insider trades, opportunistic purchases outperform by +8–10% per year. Routine trades (scheduled in advance) show no predictive power.
One of the foundational studies: insiders earn positive abnormal returns on purchases, with the strongest signal coming from small firms and high-ranking officers (CEO/CFO).
Reasons to Sell (many)
Reason to Buy (one)
The insider believes the stock is undervalued at the current price and is willing to put their own money on that conviction.
This asymmetry is why academic research consistently shows positive abnormal returns for insider purchases but not sales.
When 3+ insiders from the same company all make open-market purchases within a short window — called a cluster buy — the signal strength multiplies dramatically. Multiple people with deep, independent knowledge of the business all concluded the stock was worth buying at the same time. Historically, cluster events produce the highest post-filing forward returns of any insider signal category.
The SEC processed over 86,760 Form 4 filings in 2024 alone. The overwhelming majority — option exercises, RSU vesting events, tax-withholding sell-to-covers, gift transfers, automatic 10b5-1 plan sales — carry zero predictive signal. Unfiltered, this data is noise.
Not every insider carries equal weight. The higher the role, the broader the access to information that moves the needle — and the stronger the signal when they buy with their own money.
| Role | What They Know | Signal Weight |
|---|---|---|
| CEO | Full company strategy, pipeline, financial health, M&A plans, and investor relations | ★★★★★ |
| CFO | Revenue, margins, cash position, upcoming earnings guidance, and capital structure | ★★★★★ |
| COO | Operational capacity, supply chain efficiency, headcount plans, and execution risk | ★★★★☆ |
| CTO / CIO | Product roadmap, tech debt, breakthrough timelines, and infrastructure health | ★★★★☆ |
| CMO | Sales pipeline, customer acquisition cost, brand health, and marketing ROI | ★★★☆☆ |
| General Counsel | Legal exposure, ongoing litigation, regulatory risk, pending M&A or settlements | ★★★☆☆ |
| President | Division/segment performance, regional strategy, and high-level forecasting | ★★★★☆ |
| Director | Board-level strategy, governance decisions, M&A approvals, and long-term capital allocation | ★★★☆☆ |
| 10% Owner | A beneficial owner of ≥10% of the company's equity. Must file under Section 16. Often institutional investors or founding partners | ★★★☆☆ |
| VP / SVP / EVP | Divisional revenue, hiring trends, product launches in their domain | ★★☆☆☆ |
A CEO buying $2M of their own stock is a fundamentally different event from a mid-level VP buying $50k. The CEO has an unobstructed view of the entire business — future quarters, deal pipelines, competitive positioning — whereas a VP may only see their piece of the organisation.
Research by Seyhun (1998) explicitly confirms that officer rank is positively correlated with abnormal return magnitude. Use D-Insider's Officers Only filter to restrict the feed exclusively to C-suite and officer-level transactions.
Every Form 4 filing includes a transaction type code. Understanding these codes is essential — only code P (open-market purchase) is the primary signal D-Insider is built to surface. Everything else is context, noise, or administrative.
| Code | Name | Meaning | Signal? |
|---|---|---|---|
| P | Open-Market Purchase | The insider bought shares on the open market, spending their own money. No pre-arrangement. | ✅ PRIMARY SIGNAL |
| S | Open-Market Sale | The insider sold shares on the open market. Weak signal — see Chapter 2 for why. | ⚠ WEAK |
| A | Grant / Award | RSU or stock award granted by the company to the insider. No cash spent by the insider. | ✗ FILTERED |
| D | Disposition / Return | Shares returned to the company (e.g. to cover taxes on an award). | ✗ FILTERED |
| F | Tax Withholding (sell-to-cover) | Shares sold automatically to cover tax liability on vesting RSUs. Pre-scheduled, not discretionary. | ✗ FILTERED |
| M | Option Exercise | The insider exercised stock options. Pre-scheduled and priced months in advance. | ✗ FILTERED |
| G | Gift | Shares gifted to family, charity, or a trust. No market signal. | ✗ FILTERED |
| J | Other Acquisition | Catch-all for other methods of acquiring shares not covered above. Context-dependent. | — CONTEXT |
| V | Voluntary Report | A voluntarily reported transaction. Context-dependent. | — CONTEXT |
| X | Derivative Expiration | An option, warrant, or derivative that has expired. | ✗ FILTERED |
D-Insider scans SEC filings to surface stocks where a recent open-market purchase just occurred — that is the trigger for a stock to appear on the dashboard. Once a stock is listed, D-Insider also retrieves a partial historical transaction record of all types (grants, exercises, sales, etc.) so you have complete context around the signal. You can filter the dashboard to show only open-market purchases, but every stock you see was placed there because of a real, recent insider buy. The following transaction types are excluded from triggering a new alert:
Option Exercises (M)
Pre-priced and pre-scheduled. The insider takes no market risk.
Tax-Withhold Sales (F)
Automatic sell-to-cover events triggered by RSU vesting — not a choice.
RSU / Stock Awards (A)
The company gives shares to the insider at no cost. Zero conviction.
Gift Transfers (G)
No market decision. Shares transferred to family or charity.
10b5-1 Auto-Sales
Pre-scheduled selling plans set up months in advance. No current signal.
Sub-threshold Transactions
Transactions below a minimum dollar floor. Too small to be meaningful.
What triggers a stock to appear: Open-market purchases (P) where an insider voluntarily spent their own cash. Once on the dashboard, all historical transactions for that stock are shown for context — you can filter at any time to view only open-market purchases.
Form 4 is the bedrock of legal insider trade disclosure in the United States. Here is everything you need to understand about where the data comes from and what it contains.
SEC Form 4 — officially titled "Statement of Changes in Beneficial Ownership" — is the mandatory disclosure document filed by corporate insiders whenever they buy or sell equity securities in their own company. It is governed by Section 16(a) of the Securities Exchange Act of 1934.
The Sarbanes-Oxley Act of 2002 made a critical change: the filing deadline was tightened from 10 days after transaction to 2 business days. This means every publicly-traded company insider now leaves a near-real-time paper trail.
What a Form 4 Contains
Form Variants
Initial filing — when someone becomes an insider (takes a role or exceeds 10% ownership) for the first time.
Change in ownership — filed within 2 business days any time an insider buys or sells.
Amendment — a correction or update to a previously filed Form 4.
Annual catch-up — for voluntary or exempt transactions that were not reported on Form 4.
EDGAR (Electronic Data Gathering, Analysis, and Retrieval) is the SEC's public filing database, available at efts.sec.gov. Every Form 4 filed by a US-listed company insider is published there within hours of submission — completely free and publicly accessible.
D-Insider's ingestor continuously monitors the EDGAR feed and processes new Form 4 filings as they arrive — filtering, normalising, and surfacing them to the dashboard in near-real time. You see the signal within 3 hours of it being filed, without ever touching the raw data yourself.
The United Kingdom operates its own insider disclosure regime, governed by the Financial Conduct Authority (FCA) — the UK's equivalent of the SEC. D-Insider tracks both systems simultaneously.
In the UK, the term for a reporting insider is PDMR — Person Discharging Managerial Responsibilities. This broadly covers board directors, senior executives, and their closely associated persons (family members who share a household).
The legal framework is UK MAR (UK Market Abuse Regulation, retained post-Brexit from EU MAR). Article 19 requires PDMRs to notify both the company and the FCA within 3 business days of any transaction in the issuer's securities.
UK disclosures are published on the FCA's National Storage Mechanism (NSM) — the British equivalent of EDGAR. D-Insider ingests NSM filings and integrates them directly into the same feed as the US data, letting you filter by market flag 🇬🇧 to focus exclusively on UK trades.
While corporate insiders file SEC Form 4, the disclosure rules governing Members of Congress come from an entirely separate law — enacted in 2012 in direct response to public outcry over politicians trading in the very industries they regulate.
The Stop Trading on Congressional Knowledge Act was signed into law on April 4, 2012. It explicitly prohibits Members of Congress, their staff, and executive branch employees from using non-public information obtained through their official duties to profit in financial markets.
It also mandates public disclosure of every stock transaction exceeding $1,000 — within 45 calendar days. These filings are posted to the Secretary of the House and Senate and are publicly accessible online.
Corporate insiders know their own company. Congressional insiders know entire industries and regulatory environments. A senator on the Banking Committee buying bank stocks, or a House Armed Services member purchasing defence contractors, carries a fundamentally different informational edge than a typical trader.
Ziobrowski et al. (Journal of Financial and Quantitative Analysis, 2004) found that U.S. Senators' portfolios outperformed the market by ~12% per year from 1993–1998. A 2011 follow-up found House members outperformed by ~6% annually — both statistically significant.
| SEC Form 4 (Corporate) | STOCK Act (Congress) | |
|---|---|---|
| Who files | Corporate officers, directors, 10%+ owners | Members of Congress, spouses, senior staff |
| Deadline | 2 business days | 45 calendar days |
| Amount precision | Exact price and share count | Bracket only (e.g. $15K–$50K) |
| Regulator | SEC / EDGAR | Secretary of House / Senate |
| Scope | Their own company only | Any publicly traded security |
| Enforcement | SEC enforcement — civil & criminal | Ethics committees + public pressure |
D-Politicians is the congressional trading dashboard built into your D-Reveal subscription. It tracks every STOCK Act disclosure filed by sitting Members of Congress — processed, normalised, and surfaced in a single browsable interface alongside D-Insider.
All 535 Members of Congress tracked across both chambers — every trade they disclose, from tech stocks to commodities to ETFs.
Each politician's complete disclosure record: ticker, amount bracket, buy/sell type, transaction date, and actual filing date.
A monthly bar chart showing each politician's trade frequency over time — spot periods of heavy activity at a glance.
A sector breakdown of where a politician's disclosed trades are concentrated — useful for aligning with their committee assignments.
A ranked list of the most-traded stocks across all politicians in the selected timeframe — surfaces the names Congress keeps buying.
Browse the full roster by name, filter by party (D/R) and chamber (House/Senate), sort by trade count or last activity date.
Four headline numbers across the top: total politicians tracked, total trades in the dataset, trades filed this week, and the single most active trader by disclosure count.
The left panel lists all tracked Members of Congress. Each entry shows party badge, chamber, district or state, trade count, and date of last disclosed trade. Click any name to load their full profile.
The selected politician's photo, party, chamber, state/district, total trades, and most recent disclosure date — pulled directly from the STOCK Act filing record.
A monthly bar chart of transaction count. Green = net buying months, red = net selling. Hover bars for exact counts per month.
A donut chart breaking disclosed trades by sector or asset type. Useful for spotting concentrated exposure in sectors the politician's committee oversees.
Full chronological list of every disclosed trade: ticker, company name, type (Purchase / Sale), amount bracket, transaction date, disclosure date, and filing owner. Sortable & filterable.
Want to see D-Politicians in action before subscribing? A frozen demo with 3 real politicians is available — no sign-in required.
Unlike SEC Form 4, STOCK Act disclosures do not require exact prices or share counts. Understanding what the data does — and does not — reveal is critical to using it correctly.
The STOCK Act only requires politicians to disclose the approximate size of each trade using predefined brackets. No exact price, no share count — you know the order-of-magnitude of conviction, but not the precise exposure.
| Amount Bracket | Approximate Scale |
|---|---|
| $1,001 – $15,000 | Small retail-scale position |
| $15,001 – $50,000 | Meaningful individual trade |
| $50,001 – $100,000 | Significant commitment |
| $100,001 – $250,000 | Large, high-conviction trade |
| $250,001 – $500,000 | Very large — notable signal |
| $500,001 – $1,000,000 | Institutional-scale trade |
| Over $1,000,000 | Exceptionally large position |
Politicians have up to 45 calendar days to disclose a trade — dramatically slower than the 2-business-day window for SEC Form 4. By the time you see a congressional disclosure, the politician may have traded almost a month and a half ago.
Despite this lag, research shows the signal remains meaningful. The thesis is structural — a committee chair buying into the sector they regulate suggests long-term policy tailwinds, not short-term momentum. The 45-day-old fact that a senator bought $100K of a sector they oversee is still useful context when building a thesis around that sector.
The strongest congressional trade signals come from the intersection of committee assignment and sector exposure. Cross-reference what committees a politician sits on (Congress.gov) with their disclosed trades to identify potential structural advantages.
Armed Services
Defence, Aerospace, Cybersecurity
Finance / Ways & Means
Banks, Insurance, Asset Managers
Energy & Commerce
Oil & Gas, Utilities, Pharma
Intelligence
Cybersecurity, Gov. IT, Telecom
Agriculture
Agribusiness, Fertilisers, Commodities
Health, Education & Labor
Biotech, Pharma, Hospital Operators
Stronger Signal
Weaker Signal
You're now ready
Everything in this guide is live across two powerful dashboards. Track corporate insiders via real-time SEC Form 4 & FCA filings with D-Insider, and follow congressional stock trades under the STOCK Act with D-Politicians — noise-free signals, all in one place.