Dashboard for tracking insider trading at S&P 500 companies | Hacker News Reader

Dashboard for tracking insider trading at S&P 500 companies

quiverquant.com

151 pointsgreatwave135 comments

I posted this dashboard here back in March, but with the recent investigations into insider trading by Kodak and the USPS Postmaster General I thought it was very relevant once again.

There are a lot of sites out there which list off every insider transaction. That’s good if you want to find more detail on a specific case of suspected insider trading, but it makes it difficult to quickly identify companies with suspicious activity.

Instead of displaying data at the transaction-level, I decided to aggregate transactions from a 6-month rolling period. I then created the “Insider Confidence Index”, which measures a company’s insider trading activity relative to their total market volume.

I also created a graph showing daily net purchases/sales across all S&P 500 insiders, to give an idea of the aggregate sentiment among insiders. It was interesting to see a huge spike in selling back in early February, and then again a couple of weeks ago.

I’d love to hear any thoughts or suggestions you have on how to improve this dashboard, and if you’d prefer to see the data at a transaction-level.

You should give nongaap(on twitter) and matt levine free accounts and let them tweet what they find interesting.

Working on similar things for the data tornado that is crypto.

This is awesome! That selling peak two weeks ago is massive, makes you wonder. Do you have any idea what the most prominent tickers were back then?

> It was interesting to see a huge spike in selling back in early February, and then again a couple of weeks ago.

Any idea if this is planned share selling? Six month gap between the spikes would suggest this methinks.

What's difference does it make? People release bad news just after a planned sale. It's a total red herring.

> There are a lot of sites out there which list off every insider transaction.

Perhaps pedantic, but those sites only list registered or declared insider transactions. "Insider Trading" - the illegal kind, is trading off of non-public information and can be done by non insiders (who wouldn't have SEC-declared transactions).

Correct -- it is quite common, however, to see lists of "Insider trades" which are declared trades from known insiders.

Peter Lynch is famous for stating: "insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise." Keeping an eye on the trade flow from insiders is interesting at a minimum and at least perhaps useful.

Does converting/buying options count as insider transactions ? i.e. shares could be "bought" due to options nearing expiry etc

Option expiry is only a problem for employees. Senior management, who are the ones to watch because of their access to sensitive information, typically get options refreshed or amended.

A suggestion: Consider reporting the per-company hover-over results for market cap and sentiment index to at most two significant figures.

Selling stock is not a strong signal.

Insider buying is much stronger.

Interesting opinion.

Any evidence (anecdotal or data-driven) to support this?

You sell stock any time you need money. People need money for lots of things.

*want money

Typically you are overweight in the company you founded/have been granted lots of options in. So there are liquidity/risk management reasons to sell even if you aren't pessimistic about share price.

I hate that you are getting downvoted for this (and I will for this). Needing evidence used to be the penultimate expectation of every hacker news comment. Now its witticisms wrought with extreme prejudice. And even you asking to maybe see a study where someone determined that there was indeed a causal relationship between stock prices and the signal the previous commenters claimed is somehow grounds for an attack on your karma.

They're not downvoted.

“There are millions of reasons to sell stock, there is only one reason to buy it.”

Side question, anyone know the easiest way to lookup how many shares an individual insider currently holds? Do I need to go through the most recent 10k/q or is there somewhere else I should be looking?

This site can narrow it down for you. http://www.openinsider.com/officer-purchases-25k-past-week

RIP - HN Hug of death

Apologies, I should have it back up shortly.

EDIT: Made some changes to the database querying and caching, site should be much more fast and stable now

This is cool. It would also be interesting to see a comparison to overall outsider sentiment at a given time.

Don't use insider trading as a short term signal. Most of these transactions are contractually fixed months in advance exactly to prevent the insiders from actively trading on current knowledge.

i.e. They commit to sell 100 shares at whatever the price will be in a months time. So it does have some predictive power but only on a very long timescale. There is also a lot of noise from other factors. e.g. Maybe the exec needs cash for his kids uni. Or he feels his net worth is too concentrated in one company.

Lol you crashed the site

fyi, locked up Chrome when I loaded it on my Google Pixel 2 XL. Will load it on the laptop later

Insider trading is more significant for smaller companies outside of the S&P 500.

I don't trust this. I want to see cancellation of scheduled trades. I.e. Bezos/Cook not divesting shares on schedule all of a sudden.

Their share sales are scheduled many months in advance and cannot be canceled (10b5)

You can cancel a 10b5-1 plan whenever you choose.

A 10b5-1 plan can be cancelled, and cancelling one when in possession of inside information is not insider trading.

Could you set up one plan to buy shares and one to sell them, and cancel whichever one isn't favourable? No. There's a clause that requires you to have set up the plan in good faith. But if you planned to sell your stock, and get once-in-a-lifetime news the price is going up tomorrow, it's completely fine to cancel it.

Maybe it's not currently illegal, but shouldn't it be? Once in a lifetime news on a stock price about to go up sure sounds like material non public information to me.

OP just gave an extreme example but if the CEO saw sales was on a promising trend (or other reasons that don’t count as insider trading) he/she might cancel the sell. And it would be useful to see that.

Is there a good reason that a CEO should be able to use private sales data to inform their trades? (in this case, to cancel a previously scheduled trade)

There is no good reason. It's really a loophole in the law. An understandable one, because cancelling a trade is not legally the same as making a trade, even if financially it's the same. And one that's small enough not to have been worth closing. You won't get away with cancelling your plan every time sales data is bad, you should wait for the once-in-several-lifetimes opportunity when you get game-changing news and you were just about to sell a large quantity of stock.

You can come up with a bigger conspiracy theory than this, but the more boring explanation looks true.

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