Why do insiders sell stock?
Insiders sell shares for many reasons that have little to do with their view of the company. Pay arrives in stock, tax falls due when it vests, and a large part of their wealth sits in one company. Two well-known studies of US filings found that insider purchases carried information about later returns and insider sales did not.
Pay arrives in shares
Directors and executives of listed companies receive part of their pay as shares, restricted stock units or options. When an award vests or an option is exercised, tax is due. Many insiders sell part of the shares to pay it, or let the company withhold shares for that purpose.
On a US Form 4 that withholding has its own code, F, and an exercised option has code M. A sale on the market the same day shows as S. The Form 4 transaction codes guide lists every code. A European notification under MAR Article 19 describes the type of transaction, but neither form asks the insider why they traded. A footnote on a Form 4 sometimes explains it.
Too much in one company
An executive who has worked at one company for years can hold most of their wealth in its shares, while their salary and bonus depend on the same company. Selling part of the stake spreads that risk.
Money for something else
A sale can pay for a house, school fees, a divorce settlement or a tax bill. A gift to family or a charity is not a sale: on a Form 4 it carries code G, and in the EU it is reported as a gift.
Sales set up months before
Many US insiders sell through a 10b5-1 plan. They fix the amounts and dates at a time when they hold no inside information, and a broker carries out the sales later. Since 1 April 2023 the Form 4 has a checkbox for trades under such a plan. A plan sale follows a schedule set up front. It tells you less about the day it happens.
In the EU, managers may not trade in the 30 days before the company publishes its results (the closed period). The timing of a sale can follow the calendar of results.
What research found about sales
Josef Lakonishok and Inmoo Lee studied insider trades at all companies on the NYSE, AMEX and Nasdaq from 1975 to 1995 (Review of Financial Studies, 2001). They found that the information in insider trades came from purchases, and that insider selling had no ability to predict returns.
Leslie Jeng, Andrew Metrick and Richard Zeckhauser built portfolios of insider purchases and of insider sales from US filings between 1975 and 1996 (NBER working paper 6913, published in 2003 in the Review of Economics and Statistics). The purchase portfolio earned abnormal returns of about 0.4% a month. The sale portfolio earned none.
Both studies cover US markets in the 1970s, 1980s and 1990s, and they measure averages over thousands of trades. They do not say what one sale means, and past results say nothing certain about later years. More studies, from the UK and Germany as well, are in do insider purchases predict stock returns?.
Insider sales on this site
Insider Trades lists purchases and sales from five European registers and US Form 4 filings, each with a link to the original filing. How to read the US form is in how to read an SEC Form 4, and why several buyers at one company get their own list is in what is cluster buying?.
Checked against the regulation and the regulator’s own pages on Oct 31, 2026. This guide explains the rules; it is not legal or investment advice.
More guides
- EUMAR art. 19What is a MAR Article 19 notification?How directors' dealings are reported in the EU under the Market Abuse Regulation: who must report, the deadline, the threshold, what a notification contains and where to find them.
- USSEC Form 4How to read an SEC Form 4A field-by-field guide to the Form 4 that US company insiders file with the SEC: who files it, the two-day deadline, the transaction codes, and the 10b5-1 checkbox.
- USSTOCK ActWhat members of Congress must disclose about their tradesHow the STOCK Act makes members of the US Congress report their stock trades: the 30- and 45-day deadlines, the $1,000 threshold, the amount ranges, and what is left out.
- EUNetherlands · AFMWhen does an insider have to report a trade in the Netherlands?Who reports trades to the Dutch AFM, the three-day deadline, the €20,000 threshold, the extra Wft duty for board members, and where you find the filings.
- EUGermany · BaFinWhen does an insider have to report a trade in Germany?Directors' dealings in Germany: who reports to BaFin, the three-day deadline, the €50,000 threshold that applies since 1 January 2026, and where the filings appear.
- EUBelgium · FSMAWhen does an insider have to report a trade in Belgium?Managers' transactions in Belgium: who reports to the FSMA through eMT, the three-day deadline, the €20,000 threshold, and why the issuer has to confirm a filing first.
- EUSweden · FIWhen does an insider have to report a trade in Sweden?Insider trades in Sweden: who reports to Finansinspektionen, the three-day deadline, the €20,000 threshold, and how the insider register (insynsregistret) works.
- EUSpain · CNMVWhen does an insider have to report a trade in Spain?Managers' transactions in Spain: who reports to the CNMV, the three-day deadline, the €20,000 threshold in Article 230 of the Securities Market Act, and where the filings appear.
- EUMAR art. 19(11)What is a closed period?The 30 days before a listed EU company publishes its results, when its managers may not trade its shares: the rule, the exceptions, the Listing Act changes and the US blackout.
- EUMAR art. 3What is a PDMR?Who counts as a person discharging managerial responsibilities (PDMR) under EU law, who is closely associated with them, and why it matters for reporting trades.
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- USSEC Rule 10b5-1What is a 10b5-1 plan?How US insiders trade through a pre-arranged plan under SEC Rule 10b5-1: the rule, the 2022 changes (cooling-off, certification, overlapping plans) and the Form 4 checkbox.
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- USOGE Form 278What must the President and senior officials disclose?The OGE Form 278e financial disclosure of the US President, Vice President and senior officials, and the 278-T report of trades within 30 or 45 days.
- EUShort Selling RegulationShort positions in Europe: what is the 0.5% rule?How the EU Short Selling Regulation works: net short positions go to the regulator from 0.1% of a company's shares and become public from 0.5%, with each 0.1% step above.
- EU/USMAR vs Section 16Insider reporting in the EU vs the US: what's different?How EU and US rules on reporting insider trades compare: who reports, the three-day and two-day deadlines, the thresholds, what a filing shows and who publishes it.
- EU/USMAR art. 14 · Rule 10b-5Directors' dealings vs insider trading: what is legal?The difference between a reported directors' dealing and illegal insider trading under EU law (MAR Articles 7, 8 and 14) and US law (Rule 10b-5), with the penalties.
- EU/USLate filingsHow often are insider filings late?How many Form 4 filings, Congress trade reports and EU insider notifications arrive after the legal deadline, per year, counted from the registers on this site.
- EUNetherlands · AFMHow many insider trades are reported in the Netherlands?Managers' trades reported to the Dutch AFM, counted per year and per sector: entries in both AFM registers, companies, and open-market buys and sales.
- USSTOCK ActWhich members of Congress trade the most?Members of the US Congress ranked by the number of trades they reported for the last full calendar year, with purchases, sales and the amount ranges as filed.
- USSEC Form 4Form 4 transaction codes explainedEvery transaction code on an SEC Form 4, from P and S to A, M, F, G and J, with its meaning from the SEC's own instructions, and which codes are trades at the market.
- EU/USInsider purchasesWhat is cluster buying?Cluster buying: several insiders of one company buying its shares within a short period. How this site counts a cluster: three buyers within 90 days, by filing date.
- EU/USRegistersHow to track insider trades for freeThe official free registers of insider trades: SEC EDGAR in the US, and AFM, BaFin, FSMA, FI and CNMV in Europe. What each one lets you search and download.
- EU/USResearchDo insider purchases predict stock returns?What studies of US, UK and German filings found about share returns after insiders buy, from Lakonishok and Lee to Cohen, Malloy and Pomorski, and the limits of those findings.
- USSTOCK ActCan members of Congress trade stocks?Yes: members of the US Congress may trade stocks, but must report each trade within 45 days under the STOCK Act. The late fee, and the bills to ban trading as of 31 October 2026.
- USResearchDo politicians beat the market?What studies found about the stock returns of US senators and representatives, from Ziobrowski in 2004 to studies of trades after the STOCK Act, and why the results differ.
- USOGE Form 278What stocks does Trump own?Where to find what President Trump owns: the annual OGE Form 278e with assets in value ranges, the 278-T reports of trades, and what neither form shows.
- EUMAR art. 19Biggest insider purchases in Europe this yearThe largest open-market share purchases by company insiders in the Netherlands, Germany, Belgium, Sweden and Spain this year, ranked by amount in euros.
- EUMAR art. 19(11)When do insiders buy? Purchases by monthOpen-market purchases and sales by company insiders in the Netherlands, Sweden and Spain, counted per calendar month over all full years, and how closed periods fit in.
- USSEC Form 13FWhat is Berkshire Hathaway buying?Berkshire Hathaway's largest US stock holdings from its latest Form 13F, how many positions grew, shrank, appeared or disappeared, and what the filing leaves out.
- EU/USTransparency DirectiveMajor shareholdings in the EU: the 3% and 5% ruleWhen an investor in an EU listed company must report its stake: the 5% threshold of the Transparency Directive, lower national thresholds, the deadlines, and the US Schedule 13D.
- EU/USMCPInsider trading data in Claude and ChatGPT (MCP)Connect InsiderRadar to Claude or ChatGPT over MCP: the address, the sign-in steps, and the six read-only tools for insider, Congress, 13F and lobbying filings.