Insider

# Insider — scoring rules

Sources: SEC Form 3/4/5 Insider Transactions data sets (quarterly bulk TSV). Literature: Lakonishok & Lee (2001) "Are Insider Trades Informative?"; Cohen, Malloy & Pomorski (2012) "Decoding Inside Information". Weights were set from a 2026-10 backtest on 21 insider-confirmed buys (81% vs 43% hit rate) and will be re-estimated on the full universe.

Window: open-market transactions (codes P = purchase, S = sale) with transaction date in the last 90 days and not after the snapshot date.

Excluded from both sides, and listed on the stock page as excluded:
- transactions under a Rule 10b5-1 plan (submission checkbox or a footnote naming the plan), purchases and sales alike;
- purchases that a footnote describes as a private placement, PIPE, registered direct, purchase directly from the issuer, or an IPO / directed-share allocation;
- purchases within 30 days of the security's first trading day when the listing began inside the price history window.
Companies whose market value is unknown but that have transactions are `insufficient data (market cap unknown)` rather than scored.

| Component | Points | Definition |
|---|---|---|
| Open-market buy value / market cap | 35 | percentile rank among companies with any purchase (gross purchases; sales enter only through the penalty below) |
| Distinct buyers | 25 | 25 x min(buyers, 4) / 4 |
| Buyer seniority | 20 | 20 x max weight: CEO/CFO/Chair 1.0, President 0.9, COO 0.8, other officer 0.7, director 0.5, 10% holder 0.3, other 0.4 |
| Recency | 10 | 10 x 0.5^(days since latest purchase / 30) |
| Sales penalty | -10 | -10 x percentile rank of sale value / market cap among companies with any sale |

Score floors at 0. The buy-value and sales terms are percentile ranks within the scored population, so a company's insider score depends on which companies are ranked with it (the S&P 500 scope vs the full universe). Option exercises, grants, gifts and conversions (other codes) are ignored.

Coverage: the SEC quarterly data set is the primary source; filings after its end are loaded from the live EDGAR daily index (bounded per run). Every score states the date Form 4 data is loaded through; if more than 3 days of the window are missing the score is marked `complete: false` with `missing_tests: [current-quarter Form 4 filings]`.