How insider trading tracking works

Company insiders — officers, directors, and anyone owning more than 10% of the stock — are legally required to disclose most trades in their own company's stock to the SEC. Unlike Superinvestor tracking's quarterly 13F filings, the form insiders file (Form 4) has to land within 2 business days of the actual trade, and it discloses the real price paid — two things a 13F can never tell you.

Why only purchases count as an event

A Form 4 records several different kinds of transaction, and most of them aren't a discretionary bet on the stock at all: stock grants, option exercises, and tax withholding are ordinary compensation mechanics, not someone choosing to spend their own money. We only build a Pulse event from a genuine open-market purchase — an insider using their own cash to buy more stock, exactly like anyone else placing an order.

Why sells are shown, not signaled

Sells are a different problem: many are pre-scheduled months in advance under a 10b5-1 trading plan, or driven by taxes owed on vesting stock — routine personal finance that says little about how an insider actually feels about the business right now. Treating every sale as bearish would be misleading more often than not. Sells still show up, transparently, in a ticker's own analysis page — we just don't build a Pulse signal out of them the way we do for purchases.

The materiality floor

Not every purchase is worth surfacing — a token $500 buy doesn't carry the same weight as a $500,000 one. We apply a minimum transaction size before a purchase becomes a Pulse event, filtering out the smallest, least meaningful trades while still catching genuine smaller-cap conviction buys. The underlying transaction is still recorded either way; the floor only affects whether it's promoted to a Pulse alert.

What it does and doesn't tell you

An insider buying is a real, price-disclosed statement that someone with direct knowledge of the business chose to put more of their own money into it. It isn't a guarantee — insiders can be wrong too, and a single purchase from a director with no operating role at the company means less than a CEO putting real money in. Weight it the same way you would any other signal: alongside the Payback Price and Big Five, not instead of them.