Glossary

Directors, officers and shareholders who own more than 10% of a company must report their trades in its stock on Form 4 within two business days. Every transaction carries a one-letter code that tells you what kind of transaction it was. These are the codes you will see most often.

PPurchase

The insider bought shares with their own money, on the open market or in a private deal (for example, a company's private placement). This is the code investors watch most closely: it is money the insider chose to put in.

SSale

The insider sold shares on the open market or in a private deal. People sell for many reasons, such as paying taxes, diversifying or following a pre-set 10b5-1 plan, so a single sale usually says less than a purchase.

AGrant or award

Shares, options or restricted stock units the company gave the insider, usually as part of their pay. The insider did not buy them on the market, so this is compensation, not a purchase.

DReturned to the company

Shares disposed of to the company itself rather than sold to other investors. Examples: the company buying the shares back, or shares cancelled in a merger in exchange for cash or the acquirer's stock.

FTax withholding

Shares withheld or handed over to pay taxes or an option's exercise price when an award vests or options are exercised. It is an automatic, administrative step, not a decision to sell, and it usually appears right after an A or M.

GGift

Shares given away, or received as a gift, for example to family, a trust or a charity. No money changes hands, so it is not a buy or sell signal.

MOption exercise

The insider exercised or converted options or restricted stock units received under a company pay plan, turning them into shares at a price set in advance. It is often followed the same day by an S (sale) or F (tax withholding). It is not an open-market purchase.

XIn-the-money exercise

Exercise of an option or warrant whose exercise price is at or below the market price, outside a company pay plan. Like M, it turns a derivative into shares at a preset price; it is not an open-market purchase.

CConversion

A convertible security, such as convertible preferred stock or a convertible note, was converted into common stock. Only the form of the holding changes; nothing new is bought.

WInheritance

Shares acquired or passed on by will or inheritance, for example when an estate transfers shares to heirs.

JOther

Any other acquisition or disposition that does not fit the codes above. The filer has to explain it in a footnote, so check the original SEC filing to see what happened. Common examples are transfers between the insider's own accounts or trusts, and a fund distributing shares to its partners.

Form 4 also has a separate column marked (A) or (D), meaning the shares were acquired or disposed of. It is not the same thing as codes A and D.

If you only want to know what insiders bought or sold with their own money, look at P and S.

Form 4 has two tables. Table I (non-derivative) covers the stock itself, usually common stock. Table II (derivative) covers rights to buy or sell the stock later: stock options, warrants, restricted stock units and convertible securities. For derivatives, the share count is the number of shares they can be turned into.

When an insider exercises an option, the same event usually appears twice: the option leaves Table II and the new shares arrive in Table I. Adding the two together would count it twice, which is why exercises (M and X) should not be treated as purchases.

A Rule 10b5-1 plan is a written trading plan that an insider sets up in advance, at a time when they have no material non-public information. After that, trades happen automatically on the dates, amounts or prices written in the plan. Because the timing was decided months earlier, a planned sale says little about what the insider thinks today.

The SEC tightened the rules in 2023. Directors and officers must now wait at least 90 days (up to 120) after adopting or changing a plan before trading under it, and Form 4 has a checkbox showing whether a trade was made under a plan. Filings from before April 2023 don't have this checkbox, so older trades can't be told apart this way.

Form 13F shows what large institutional investors own.

Who files

Investment managers with $100 million or more in 13(f) securities (mainly US-listed stocks), such as hedge funds, mutual fund companies, banks and pension funds.

When

Every quarter, within 45 days after the quarter ends. It is a snapshot of the last day of the quarter, so by the time it is published it can be up to 45 days old, and the positions may already have changed.

What's included

Only long positions in 13(f) securities, such as US-listed stocks, ETFs, some convertible bonds and listed options. Short positions, cash, most bonds and stocks listed only abroad are left out, so a 13F is not the whole portfolio. Call and put option positions are reported separately from shares.

Amendments (13F-HR/A)

A restatement replaces the original filing for that quarter. A new-holdings amendment adds positions that were left out, often ones the SEC had allowed the manager to keep confidential for a while.

Complete quarters

Filings keep arriving until the 45-day deadline, so a quarter is only complete once the deadline has passed. Numbers for a quarter that is still being filed will look too low.

Anyone who comes to own more than 5% of a company's voting shares has to tell the SEC. There are two forms:

Schedule 13D

The long form, for investors who may try to influence or control the company, such as activist investors. It has to explain the purpose of the investment and any plans, like seeking board seats or pushing for a sale of the company. It is due within 5 business days of crossing 5%, and must be amended within 2 business days of any material change, such as buying or selling 1% or more.

Schedule 13G

The short form, for passive investors with no intention of influencing the company, and for institutions such as banks, brokers, insurers and investment advisers that bought in the ordinary course of business. Index funds are the classic example. Deadlines are looser: from 5 business days to 45 days after the quarter ends, depending on the type of filer.

If a 13G filer changes its mind and wants to influence the company, it has to switch to a 13D. A switch from 13G to 13D is worth noticing.

Form 144 is a notice that someone plans to sell. It is filed by company insiders (directors, officers and major shareholders) and by holders of restricted stock when they expect to sell more than 5,000 shares or more than $50,000 worth within three months, at the same time the sell order is placed.

It is an intention, not a completed trade: the sale may end up smaller, or may not happen at all. If the seller is a director, officer or 10% owner, the actual sale shows up later on Form 4. Form 144 has been filed electronically since April 2023.

Under the STOCK Act of 2012, members of the House and Senate must report trades of stocks and other securities worth more than $1,000, including trades by their spouses and dependent children, in a Periodic Transaction Report (PTR). The report is due within 30 days of learning about the trade, and no later than 45 days after the trade date.

Amounts are reported only as ranges, such as $1,001–$15,000, not exact figures. And the data is never real-time: a trade can become public up to 45 days after it happened, or even later when a report is filed late. House reports are published by the Clerk of the House; Senate reports through the Senate's electronic financial disclosure system (eFD).