Whenever a CEO, any corporate officer, or any prominent owner, makes a buy or sell with shares, they legally have to disclose that. Here's how it works. Head over to Google and search "openinsider." Click the first link, which should be openinsider.com, and you will see a lot of confusing data on the screen. We are going to discuss all of them in this blog.
Every trade is filed
Whenever an insider makes a trade, they legally have to disclose their trade and file it to become public information. There typically is a couple of day delay between the filing date and the trade date for it. For example, an insider might make an $11 million purchase with the shares on September 30th, which is the trade date, but if they don't file it until October 1st, there will be a delay until the public knows they made that purchase. There is typically a delay between the filing date and the trade date.
Select your category for trade
On OpenInsider, you can search from any category you want. You can search for a purchase, a sale, or you can even look for only trades made by a CEO. Using the search function on the top of the page, you can look for precisely the class and information you want. You can scroll up and down freely to have a complete look. By clicking the top insider purchases over the past week, we can see the most significant purchases recently. You can search for any given stock as well. So if we go to “purchases," we can see Insider purchases from the past week. We can see the most significant purchases over the past week. Generally speaking, the more money that is put into the stock, the more confident the insider is. Feel free to scan through the lists of all categories on the website.
There's a lot of great information here on OpenInsider, and there are so many different things you can do.
You can look for only purchases, purchases with only a specific dollar amount. You can follow only trades by the CEO etc. If you go to the "latest," you can look at the latest penny stock, latest buys, etc.
You can Filter to “ CEO trades only," and if you only want to see buys by the CEO, you select "buys."
And now we can see only the CEO's buy trades. You can scroll through it, and you can further sort by how many how much money goes into it.
Insider buying shares have only one meaning.
Keep one thing in mind whenever it comes to insider buying and selling.
Insiders can sell their shares for any number of reasons. They might think the stock price is going to fall. They might know a crazy bad new catalyst will come out, or they might just want to buy a new yacht and take some profits.
There's only one reason when they buy shares, and that's if they think the stock price will rise. This can give us a lot of good information. If insiders are buying millions of dollars worth of their own stock, they are doing that because they think it's undervalued and a good time to buy.
In the attached video, we saw insiders buying $18 million worth of the stock, and they're also boosting their position by 38%, which represents a lot of confidence.
Insiders know more than anybody.
No matter how much research you do, insiders will almost always know more about their company than you. They're the ones who are actually running the company and making crucial decisions. Following their stock trades can be a very lucrative trading strategy if done correctly.