Insider Buying: Which Purchases Actually Matter

Updated Oct 28, 2026 · 3 min read

When a company's executives or directors buy its stock with their own money, they must tell the SEC on Form 4 within two business days. Unlike 13F and Congress disclosures, that makes insider buying one of the fastest public signals there is. But most insider purchases don't mean much. Here's how to tell the difference.

Buys matter more than sells

Insiders sell for all kinds of reasons: taxes, diversification, a house. They buy for mostly one reason. Research has long found that purchases carry more information than sales.

Ignore routine buyers

Some insiders buy in the same month every year, through a plan or out of habit. A well-known Harvard study (Cohen, Malloy and Pomorski, "Decoding Inside Information") found these routine trades predict almost nothing, while opportunistic trades, by insiders who trade regularly but not on a fixed schedule, carry the signal. We label every purchase on our insider buying page this way.

Look for clusters

One director buying is weak evidence. Three or more officers and directors buying the same stock within a few weeks, on different days, is more interesting. We list current clusters at the top of the insider page.

Filter out the noise

• 10% owners are usually funds, not people inside the business. We exclude them.
• Offering participation: insiders buying in a placement or IPO on the same day at the same price isn't an open-market judgement call.
• Tiny purchases and penny stocks add noise.

The honest caveat

Recent research suggests most of the price move happens before the filing is public, between the trade and the Form 4. Our backtests of insider clusters and opportunistic insider buys show how much is left for someone acting on the public filing. Spoiler: less than the headlines suggest.

Look up any company on its stock page, for example NVDA, to see insider buying, famous funds that hold it, and Congress trades in one place.