UPDATED: April 2022
The Profit Secrets of Insider Trading – In the modern world today, investors have an abundance of advanced tools at their disposal designed to help them with investment decisions and financial analysis. However, one thing that is overlooked most often is evaluating the patterns of insider trading. With this, we’re not referring to illegal insider trading activities, but we are focusing on legitimate transactions made by insiders or corporate executives.
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The Profit Secrets of Insider Trading
A good strategy to employ when investing is to always know the company inside out before you even think about becoming a part-owner. Any investor who is diligent should completely understand every aspect of the operations of a company, which includes its suppliers, customers, potential weaknesses, and competitive advantages. However, no matter how many hours you spend on researching and studying a company, you still won’t know a company as well as its top executives. That’s because these corporate insiders have access to private sales data and are involved in all major operations of the company.
Why It’s Important to Analyze Insider Trading Before Investing
Corporate insiders have the same goals as an investor when they are investing in the shares of their company, as they want to buy low and sell high. That’s why it’s important to keep an eye on insider trading happening within a company, as it provides important clues about the performance of a company.
Market research has found that analyzing insider trading patterns can give you important clues about the performance of a stock. Numerous studies have shown this by reviewing years of stock price data and found that price movements that were going up are always followed by strong insider buying.
Even though you can get many clues from insider trading activity, it still doesn’t provide you with enough information to predict future share price movements. That’s because most times, insider trades don’t offer any predictive value. However, investors should consider the behavior of insiders of the company, as their sale and purchase patterns do offer strong predictive value.
Conclusion to The Profit Secrets of Insider Trading
That’s why it is important for investors to fully understand how to analyze the trading activity of insiders, and they can do that by looking at the following factors:
- Size of the sale or purchase
- Identity of the insider
- Size of the company
- Consensus among insiders
When you carefully consider all of these trading factors, you get the complete picture of insider trading taking place in a company. These give you insights into the stock prices and how company executives view their long-term performance in the market.
About the Author & How YOU Can Profit: This article is the copyrighted product of the team at BuybackAnalytics.com .
Buyback Analytics is a Top Tier Investing Platform to help investors find, analyze, and profit from investing opportunities not found through traditional investment tools. We specialize in this simple concept: Follow the trades of Insiders – CONSISTENTLY PROFITABLE Traders, Investors, and Institutions because THEY get Inside Information that YOU don’t:
LEGAL Insider Trading / Inside Traders (CEOs, CFOs, Corporation’s Accountants & Attorneys, Politicians, etc.)
Stock Buybacks (Share Repurchases) by Public Corporations (ie. Apple, Tesla, Netflix, Meta (Facebook), Microsoft, etc.)
Market Moving Institutions (Examples: Market Makers, Investment Banks, Stock Brokerages, Hedge Funds, etc.)
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