Insider Buying & Selling

Insider trading, in its legal form, refers to company executives, directors, and large owners buying or selling their own company shares and disclosing it as required by regulators. These transactions can hint at how the people who know the business best view its prospects. This is distinct from illegal insider trading on non-public information.

Watch insider buying as a potentially encouraging signal, since insiders usually buy only when they expect gains, while selling is noisier because insiders sell for many personal reasons. Focus on the size and cluster of transactions rather than isolated trades. Use it as supporting evidence alongside fundamentals, not as a standalone signal.

If several executives buy large amounts of their own stock with personal money after a price drop, it can signal confidence in a recovery. A lone, small sale to fund a house purchase carries far less meaning.