What is insider trading?
"Insider trading" gets used to describe two very different things, and conflating them is where most confusion comes from.
Legal insider trading (what InsiderTradingRadar tracks)
Company officers, directors, and large shareholders are allowed to buy and sell their own company's stock. When they do, they're required to publicly disclose it via SEC Form 4, typically within two business days. This is legal, routine, and extremely common — every executive who receives stock compensation or personally buys shares in their own company generates one of these filings. InsiderTradingRadar monitors exactly this: public, disclosed, legally-required filings. See what is Form 4 for how the disclosure itself works.
Illegal insider trading
Illegal insider trading means trading a security based on material, non-public information (MNPI) — information that isn't available to the rest of the market and would reasonably affect the stock's price if it were. This applies whether or not the trader is a company insider; anyone who trades on MNPI, or passes it to someone else who trades on it, can be liable. This is a securities-fraud matter, investigated and prosecuted by the SEC and DOJ, and it's not something that shows up as a public Form 4 filing — by definition, illegal insider trading isn't disclosed voluntarily.
Why the distinction matters for interpreting alerts
Every transaction InsiderTradingRadar surfaces is already public and already legally disclosed. What a Form 4 purchase or sale means for a stock's future price is a separate, genuinely uncertain question -- academic research has studied whether insider buying and selling patterns historically correlate with subsequent price moves, but a single filing is not a signal on its own, and past patterns are not a guarantee of future ones.
This is informational content, not investment advice. Past performance is not indicative of future results. See our track record for how InsiderTradingRadar presents historical performance data, with sample sizes and a benchmark comparison shown alongside every stat.