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Insider Analysis 02 Jan 2026 · 5 min read

SEC Form 4 Explained: How to Track Insider Trades in Real Time

Every US insider purchase is disclosed on a Form 4 within two business days. Here's exactly how to read one, what each field means, and the signals DipBuster watches for.

Every corporate insider — director, officer, or beneficial owner of more than 10% of a public company — must file a Form 4 with the SEC within two business days of any transaction in the company's securities. This two-day window means real-time disclosure. DipBuster monitors Form 4 filings to surface cluster buys as they happen.

What a Form 4 Tells You

The filing contains: the insider's name and relationship to the company; the transaction type (purchase, sale, exercise of options, gift); the date, number of shares, and price per share; the total shares owned after the transaction; whether the purchase was direct or indirect (through a trust or family entity).

FORM 4 FIELD GUIDE — WHAT TO LOOK FOR

Field

What It Means

Transaction Code P

Open market purchase — the most bullish signal. No contractual obligation.

Transaction Code S

Sale. Ambiguous. Check if planned 10b5-1 (pre-arranged).

Transaction Code A

Award. Shares granted by company. Neutral — no personal capital deployed.

Transaction Code M

Option exercise. Only meaningful if combined with retention (no simultaneous sale).

Footnote: 10b5-1

Pre-arranged trading plan. Reduces signal strength — was decided months ago.

What Counts as a Cluster

DipBuster defines a cluster as two or more separate insiders making open-market purchases (Transaction Code P, no 10b5-1 footnote) within a 48-hour window. This is the highest-confidence insider signal. Academic research shows the probability of 12-month outperformance rises from ~62% for single insider buys to ~71% for cluster buys of 2+ insiders, and ~78% for clusters of 3+.

Option Exercises: Read Carefully

When an insider exercises options and immediately sells the resulting shares (a "same-day sale"), it's not a bullish signal — it's tax planning. The signal is only present if the insider exercises options and retains the shares. Look for the combined filing: Transaction Code M (exercise) on the same day as a sale coded S with the same share count — that's an exercise-and-sell. No retained shares, no signal.

UK Equivalent: PDMR Notifications

For UK stocks, the equivalent filing is the PDMR (Persons Discharging Managerial Responsibility) notification under the Market Abuse Regulation. Filed via RNS within three business days. Less standardised than Form 4 but contains the same key information. DipBuster monitors UK PDMR filings alongside US Form 4s in its insider activity scoring.

Form 4 filings are public at sec.gov/cgi-bin/browse-edgar. For educational purposes only.

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Disclaimer: Not financial advice. DipBuster is an information platform. Always do your own research before investing.