How to read insider buying

Insider buying is when a company's officers, directors or 10%+ owners buy its shares with their own money, reported on a Form 4. The purchases worth attention are open-market buys: shares bought at the market price, not granted, not exercised from options, and not bought in an offering at a set price.

Five things to look at

1. Who bought. A chief executive or chief financial officer knows the business closely; a director buying their first shares is common after joining the board. A 10% owner is often a fund, so read it as a fund's decision.
2. How much, relative to them. $50,000 can be a token amount for one insider and a large commitment for another. A purchase that doubles someone's stake says more than one that adds 1%.
3. How many insiders. Two or more different insiders buying within a couple of weeks, a cluster, is less likely to be one person's routine.
4. When. Purchases after a steep fall can mean insiders think the price is too low. They can also be too early. Purchases made under a pre-set 10b5-1 plan were scheduled in advance, so they carry less information.
5. What else is happening. Large sales by other insiders, an offering, or a takeover can change what a purchase means.

What insider buying isn't

It isn't a guarantee or a short-term timing signal. Insiders can be wrong, and they're restricted on when they can trade. Treat it as one piece of evidence and read the filing yourself.

How AlphaFilings scores it

Each stock gets a score from 1 to 99 that weighs every filing on it together, and each stock page shows which filings matter most. The score ranks the strength of the filing evidence. It isn't a probability that the stock will rise.

See the stock pages →

Questions

Is insider buying a good sign?

It can be one piece of evidence, especially open-market buys by several insiders, but it doesn't predict prices.

What is a cluster buy?

Two or more different insiders buying the same company's stock on the open market within a short window.

Why do 10b5-1 plan purchases count for less?

They were scheduled in advance, so they say less about what the insider thinks today.

Updated 2026-11-02. Rules and deadlines are summarised from the SEC's own guidance; check the SEC's pages for the full requirements. This page is general education, not investment advice.