What are executive scheduled trades and 10b5-1 plans?
It is a rule regarding a plan that predetermines trades. You cannot determine the judgment made today solely based on the title that a sale occurred today.
Table of contents
Remember this first
First, 3 things to remember
- 1Trades may be executed later according to a pre-determined plan.
- 2The date a plan is created and the date a trade is actually executed may differ.
- 3A trade does not automatically become legal just because it is marked as a plan.
Today's order may have been set in advance.
10b5-1 is the name of a U.S. rule regarding qualified pre-arranged trading plans. It requires meeting specific conditions, such as the plan being established in good faith before the individual possesses material non-public information.
If you are a beginner, rather than memorizing numbers, you should first understand that the time a trading plan is established and the time it is executed can differ. It does not simply mean that a reservation button was pressed.
Mark two dates on the calendar.
Suppose a plan is created in month 1 and a trade is executed in month 6. One cannot conclude that an executive anticipated negative news on that specific day simply by looking at a sale in month 6.
Check the planned trade indicator, the date the plan was created, and the relevant footnotes in Form 4·5 documents that report trades by executives and others. You may need to check other company filings for information on changes to or terminations of plans.
The label of a 'plan' is not a universal exemption.
The rule includes waiting periods and other conditions. Because application varies based on an individual's position and circumstances, do not judge all cases based on a single fixed date.
For individual investors, it is good practice to distinguish and record whether a plan exists, the date, and the actual quantity. That information alone cannot reveal the company's future earnings or all the judgments made by the trader.
You should not make such assumptions
“If a trade is marked as a planned trade, does that mean there are no issues under any circumstances?”
Whether the established conditions are met is what matters. A single indicator is not a guarantee of all facts.
Check what you have read.
- Did you separate the date the plan was created from the trade date?
- Have you read the document's labels and footnotes?
- Did you infer someone's inner thoughts on that day just by looking at the trade?
Apply what you read to the actual screen
Try it on WAPE
Source and scope of verification
Reviewed · Version 1
- SEC Adopts Amendments to Modernize Rule 10b5-1 Insider Trading PlansNew window
SEC · Verify 2026-10-20
Conditions and timing for pre-planned strategies. · Form 4·5 plan indication and adoption date
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.