
Dashboard for tracking insider trading at S&P 500 companies - greatwave1
https://www.quiverquant.com/sources/insidertrading?hn=2
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greatwave1
I posted this dashboard here back in March, but with the recent investigations
into insider trading by Kodak and the USPS Postmaster General I thought it was
very relevant once again.

There are a lot of sites out there which list off every insider transaction.
That’s good if you want to find more detail on a specific case of suspected
insider trading, but it makes it difficult to quickly identify companies with
suspicious activity.

Instead of displaying data at the transaction-level, I decided to aggregate
transactions from a 6-month rolling period. I then created the “Insider
Confidence Index”, which measures a company’s insider trading activity
relative to their total market volume.

I also created a graph showing daily net purchases/sales across all S&P 500
insiders, to give an idea of the aggregate sentiment among insiders. It was
interesting to see a huge spike in selling back in early February, and then
again a couple of weeks ago.

I’d love to hear any thoughts or suggestions you have on how to improve this
dashboard, and if you’d prefer to see the data at a transaction-level.

~~~
ghouse
> There are a lot of sites out there which list off every insider transaction.

Perhaps pedantic, but those sites only list registered or declared insider
transactions. "Insider Trading" \- the illegal kind, is trading off of non-
public information and can be done by non insiders (who wouldn't have SEC-
declared transactions).

~~~
ISL
Correct -- it is quite common, however, to see lists of "Insider trades" which
are declared trades from known insiders.

Peter Lynch is famous for stating: "insiders might sell their shares for any
number of reasons, but they buy them for only one: they think the price will
rise." Keeping an eye on the trade flow from insiders is interesting at a
minimum and at least perhaps useful.

~~~
manquer
Does converting/buying options count as insider transactions ? i.e. shares
could be "bought" due to options nearing expiry etc

~~~
jacques_chester
Option expiry is only a problem for employees. Senior management, who are the
ones to watch because of their access to sensitive information, typically get
options refreshed or amended.

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encoderer
Selling stock is not a strong signal.

Insider buying is much stronger.

~~~
albertshin
Interesting opinion.

Any evidence (anecdotal or data-driven) to support this?

~~~
kortilla
You sell stock any time you need money. People need money for lots of things.

~~~
vmception
*want money

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brm
Side question, anyone know the easiest way to lookup how many shares an
individual insider currently holds? Do I need to go through the most recent
10k/q or is there somewhere else I should be looking?

~~~
brian_herman
This site can narrow it down for you. [http://www.openinsider.com/officer-
purchases-25k-past-week](http://www.openinsider.com/officer-
purchases-25k-past-week)

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lefrenchy
RIP - HN Hug of death

~~~
greatwave1
Apologies, I should have it back up shortly.

EDIT: Made some changes to the database querying and caching, site should be
much more fast and stable now

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piracy1
This is cool. It would also be interesting to see a comparison to overall
outsider sentiment at a given time.

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Havoc
Don't use insider trading as a short term signal. Most of these transactions
are contractually fixed months in advance exactly to prevent the insiders from
actively trading on current knowledge.

i.e. They commit to sell 100 shares at whatever the price will be in a months
time. So it does have some predictive power but only on a very long timescale.
There is also a lot of noise from other factors. e.g. Maybe the exec needs
cash for his kids uni. Or he feels his net worth is too concentrated in one
company.

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great_reversal
Lol you crashed the site

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jcrben
fyi, locked up Chrome when I loaded it on my Google Pixel 2 XL. Will load it
on the laptop later

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dasudasu
Insider trading is more significant for smaller companies outside of the S&P
500.

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crb002
I don't trust this. I want to see cancellation of scheduled trades. I.e.
Bezos/Cook _not_ divesting shares on schedule all of a sudden.

~~~
oh_sigh
Their share sales are scheduled many months in advance and cannot be canceled
(10b5)

~~~
dmurray
A 10b5-1 plan _can_ be cancelled, and cancelling one when in possession of
inside information is not insider trading.

Could you set up one plan to buy shares and one to sell them, and cancel
whichever one isn't favourable? No. There's a clause that requires you to have
set up the plan in good faith. But if you planned to sell your stock, and get
once-in-a-lifetime news the price is going up tomorrow, it's completely fine
to cancel it.

~~~
benrbray
Maybe it's not currently illegal, but shouldn't it be? Once in a lifetime news
on a stock price about to go up sure sounds like material non public
information to me.

~~~
AznHisoka
OP just gave an extreme example but if the CEO saw sales was on a promising
trend (or other reasons that don’t count as insider trading) he/she might
cancel the sell. And it would be useful to see that.

~~~
benrbray
Is there a good reason that a CEO should be able to use private sales data to
inform their trades? (in this case, to cancel a previously scheduled trade)

~~~
dmurray
There is no good reason. It's really a loophole in the law. An understandable
one, because cancelling a trade is not legally the same as making a trade,
even if financially it's the same. And one that's small enough not to have
been worth closing. You won't get away with cancelling your plan every time
sales data is bad, you should wait for the once-in-several-lifetimes
opportunity when you get game-changing news _and_ you were just about to sell
a large quantity of stock.

You can come up with a bigger conspiracy theory than this, but the more boring
explanation looks true.

