How can I check news about an executive buying stock via Form 4?
First, distinguish whether the increase in shares is due to direct purchases or company compensation.
Table of contents
Remember this first
First, 3 things to remember
- 1Form 4 is a report disclosing stock transactions by insiders.
- 2Even if shares increase, they may not have been purchased with their own money.
- 3Check the transaction reason code along with the actual transaction date.
Alphabet codes indicate the reason for the change in stock holdings.
Insiders such as company executives and directors must report certain transactions. Form 4 contains codes indicating how shares increased or decreased. Codes are labels that briefly indicate the reason.
P is used for purchases, and S is used for sales. A is used for shares received as compensation, M for exercising rights to convert into stock, and F for shares withheld to pay taxes or exercise costs. Read the individual explanations as well.
| Code | Simple meaning |
|---|---|
| P / S | Bought / Sold |
| A | Received as company compensation, etc. |
| M | Exercised rights to convert |
| F | I paid taxes and exercise costs with shares. |
Do not double-count options and actual shares.
An option is the right to buy or sell stock under specified conditions. If you received common stock by exercising options granted by the company, the change in rights and the change in shares may be displayed separately.
Do not add these as two independent market purchases. "Acquisition" means received or bought, while "disposition" means sold or transferred. Check which column it is indicated in.
Read the fine print and dates as well.
The footnotes at the bottom of the document provide detailed explanations of the table. They may explain whether the holdings are direct, held through related entities, or if the transactions were made according to a pre-determined plan.
A filing today does not necessarily mean the trade occurred today. Even after checking the trade date and reason, do not determine the company's future based solely on the actions of one executive.
You should not make such assumptions
“Since the holdings have increased, they were purchased in the market with their own capital.”
These may be shares received as company compensation or through the exercise of rights. Check the transaction reason code.
Check what you have read.
- What does the transaction code signify?
- Did you double-count the shares and rights?
- Have you also read the dates and detailed descriptions?
Apply what you read to the actual screen
Try it on WAPE
Source and scope of verification
Reviewed · Version 2
- Insider Transactions and Forms 3, 4, and 5New window
SEC Investor.gov · Verify 2026-10-20
Distinction and annotations for transaction codes P, S, A, M, and F.
This is educational material for observation and information comprehension. Hypothetical examples do not represent actual stocks or performance and do not provide buy or sell recommendations.