Insider trading plays a major role in stock price movements. When insiders like promoters or directors buy shares, it shows their confidence in the company, and prices may rise as other investors follow. On the other hand, if they sell shares in large amounts, it can create doubt, and prices may fall. Their actions often create short-term or long-term moves in the stock market.

What Is Insider Trading?

Insider trading refers to buying or selling a company’s shares by people who have access to non-public and important company information. These people are usually promoters, directors, or top-level employees. In India, legal insider trades must be reported to SEBI and are published in insider trading reports. This helps investors track insider activity and understand how it affects stock prices.

How Insider Buying Affects Stock Prices?

When insiders buy shares of their own company, it sends a strong positive signal to the market. Investors see this as a sign of confidence and believe the company has good future potential. This can increase demand for the stock and push the price upward. Insider buying often attracts attention from traders and long-term investors alike.

How Insider Selling Impacts Stock Prices?

Insider selling can create fear in the market. If a promoter or director sells a large number of shares, investors may worry that something is wrong with the company. This fear can cause more people to sell the stock, which leads to price drops. However, sometimes insiders sell for personal reasons, not because of company problems, so it’s important to check the full picture.

Can Insider Trades Predict Price Movements?

Yes, many times insider trades can predict short-term and long-term price movements. If insiders buy regularly and in large amounts, it often means they believe the stock will go up. Investors can take this as a strong signal. But it’s better to use insider trading reports with other research like company performance and sector trends for safer decisions.

How to Find Insider Trading Reports?

You can find insider trading reports on the SEBI website, NSE or BSE official sites, and on financial portals. These reports show who bought or sold shares, how many, and when. Regularly tracking these reports helps you understand stock movements better and gives you clues about what company leaders expect in the future.

Should You Rely Only on Insider Trades?

No, you should not rely only on insider trades for your investment decisions. Use them as one of many tools. Combine insider trading data with other research like balance sheets, quarterly results, market trends, and technical analysis. This gives you a complete view and helps you take smarter trading decisions with more confidence.