Tracking insider trading activity is important before investing because it shows what company insiders like executives and directors are doing with their own shares. If insiders are buying shares, it usually means they believe the stock will perform well. If they are selling a lot, it may be a warning sign. This helps investors make smarter decisions about buying or selling stocks.
What is Insider Trading Activity?
Insider trading activity means buying or selling a company’s shares by people who work inside the company, such as CEOs, CFOs, or board members. These insiders have better knowledge of the company’s future plans and financial health. Tracking their trades helps investors understand how confident insiders are about the company.
Why Do Insiders Buy or Sell Shares?
Insiders buy shares when they expect the company’s value to rise in the future. They may sell shares for personal reasons or if they feel the stock price is high. Tracking these moves gives clues about the company’s health and future prospects.
How Does Insider Trading Impact Stock Prices?
Insider buying often signals confidence and can lead to price increases as other investors follow. Heavy insider selling may cause concern and price drops. Markets watch insider trades closely as they reflect management’s view. However, insider trades should be considered with other information before making decisions.
Where Can Investors Find Insider Trading Data?
Insider trading data is available on stock exchange websites, financial news portals, and brokerage platforms. In India, SEBI requires insiders to disclose their trades. Many websites and apps track this data and show it clearly to help investors.
Should Investors Rely Only on Insider Trading Activity?
No, investors should not rely only on insider trading activity. It is one of many signals to consider. Combine it with company fundamentals, market trends, and news for a complete picture. Insider trading gives useful hints but not guarantees about stock performance.
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