SEC Form 4

What is Form 4?

SEC Form 4 is the document that corporate insiders must file with the Securities and Exchange Commission whenever they buy or sell shares of their own company's stock. "Insiders" includes officers (CEO, CFO, etc.), directors, and anyone who owns more than 10% of the company's shares.

Filing requirements

• 2 business day deadline: insiders must file Form 4 within two business days of the transaction. This makes it some of the most timely trading data available, unlike congressional trades which allow up to 45 days.
• Exact amounts: unlike the STOCK Act bracket system, Form 4 discloses exact share counts and prices.
• Public record: all Form 4 filings are available for free on the SEC's EDGAR system.

Why insider trades matter

Corporate insiders know their company better than any analyst. They see the pipeline, the financials, and the competitive landscape from the inside. While insider selling can be routine (tax planning, diversification, pre-planned 10b5-1 sales), insider buying is almost always a bullish signal.

• Insider buying: when a CEO puts their own money into the stock, they believe it is undervalued. Academic research consistently shows that stocks with recent insider buying outperform the market over the following 6-12 months.
• Insider selling: less informative on its own. Executives sell for many reasons (new house, kids in college, portfolio diversification). But cluster selling by multiple insiders at the same time can be a warning sign.
• 10b5-1 plans: pre-scheduled trading plans that allow insiders to sell on autopilot. These are less informative because the decision to sell was made weeks or months earlier, not in response to current information.

How to use Form 4 data

• Watch for cluster buying: one insider buying could be personal. Three insiders buying in the same week is a signal.
• Check the title: a CFO buying is more significant than a junior VP. The closer to the numbers, the more meaningful the trade.
• Compare to history: is this insider a regular seller who buys once a year? That annual buy is more meaningful than a director who trades every month.
• Ignore 10b5-1 sales: pre-planned sales are noise. Focus on discretionary purchases.

RiskPicks and Form 4

RiskPicks parses SEC Form 4 filings daily and displays insider trades on the /insiders page and in the calculator card. The AI Sentiment analysis includes recent insider trades in its data feed, distinguishing between discretionary trades and pre-planned 10b5-1 sales. When a CEO just bought M of their own stock, the AI factors that in.