What is an SEC Form 4?
Form 4 reports a change in a company insider's holdings. Officers, directors and owners of more than 10% of a company's stock must file one within 2 business days of most trades in its shares.
What's in it
For each transaction: the date, a code for the kind of transaction, the number of shares, the price, and how many shares the insider owns afterwards, directly or indirectly (through a trust or a family member, for example).
Common codes: P (a purchase on the market), S (a sale), A (an award of shares), M (an option exercised), F (shares withheld to pay tax) and G (a gift). Since 2023, a checkbox shows whether a trade was made under a 10b5-1 trading plan.
Why investors watch them
Insiders know their companies better than anyone, and they report quickly. Purchases on the market, in particular, are read as a vote of confidence. Most sales mean less: insiders sell for taxes, diversification and personal reasons, and many sales are scheduled in advance.
Hedge funds file Form 4s too, when they own over 10% of a company or sit on its board.
Related pages: Insider Trading Tracker Largest insider buys