> ## Documentation Index
> Fetch the complete documentation index at: https://docs.insighthread.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Insider Trade Tracking, Conviction Scoring & Cluster Signals

> Insighthread tracks every Form 3, 4, and 4/A transaction daily, featuring proprietary Conviction Scoring, cluster signals, and sector heat maps.

Insighthread tracks every insider transaction reported to the SEC through Form 3, Form 4, and Form 4/A filings — updated daily, sourced directly from EDGAR, with a layer of proprietary intelligence that helps you separate meaningful signals from routine activity. Officers, directors, and major shareholders are required by law to report their transactions within two business days, giving you a near-real-time window into how the people who know a company best are positioning themselves.

## What Is Tracked

For every reported insider transaction, Insighthread captures the full set of details disclosed in the SEC filing:

<CardGroup cols={2}>
  <Card title="Who Transacted" icon="user" href="https://app.insighthread.com">
    The name and role of the reporting person — CEO, CFO, COO, Director, 10%+ shareholder, or other officer — so you can weight the signal by the insider's seniority and proximity to the business.
  </Card>

  <Card title="What They Traded" icon="arrow-right-arrow-left" href="https://app.insighthread.com">
    The security type, number of shares, and dollar value of the transaction, along with whether it was a purchase, a sale, a gift, or an option exercise.
  </Card>

  <Card title="Transaction Date" icon="calendar" href="https://app.insighthread.com">
    The date the transaction was executed (not the filing date), giving you an accurate timeline of when the insider actually moved.
  </Card>

  <Card title="Transaction Type" icon="tag" href="https://app.insighthread.com">
    Whether the transaction was an **open-market purchase or sale** — the highest-conviction type — or an option exercise, stock grant, or other non-discretionary transaction.
  </Card>
</CardGroup>

## Conviction Scoring

Not all insider transactions carry the same weight. An executive selling 2% of their position to cover a tax bill is very different from a CEO making a large open-market purchase with personal funds. Insighthread's proprietary **Conviction Score** is designed to surface the transactions that actually mean something.

The Conviction Score evaluates each transaction against multiple factors:

<AccordionGroup>
  <Accordion title="Transaction Size Relative to Holdings">
    A purchase that represents a significant percentage of the insider's existing position — or their estimated net worth — carries far more signal than a token buy. The Conviction Score adjusts for position size so that large relative moves rank higher regardless of absolute dollar amount.
  </Accordion>

  <Accordion title="Open-Market vs. Non-Discretionary">
    Open-market purchases are the strongest signal: the insider chose to spend personal capital on the stock at the prevailing market price. Option exercises, restricted stock vesting, and stock compensation grants are non-discretionary and are scored lower, since they don't reflect an active investment decision.
  </Accordion>

  <Accordion title="Cluster Activity">
    When multiple insiders at the same company transact in the same direction within a short window, the Conviction Score for each transaction rises. Coordinated buying or selling across several insiders is treated as a stronger aggregate signal than an isolated transaction.
  </Accordion>

  <Accordion title="Timing Relative to Earnings">
    Transactions that occur well outside of typical blackout periods — far from earnings announcements — can carry different weight than trades made in open trading windows immediately after results are published. The Conviction Score accounts for where the transaction falls in the earnings calendar.
  </Accordion>
</AccordionGroup>

Conviction Scores are displayed on every insider transaction card and used to sort and filter the insider feed so that the highest-signal transactions surface first.

## Cluster Signals

A **cluster signal** fires when multiple insiders at the same company report transactions in the same direction — all buying or all selling — within a defined time window. Cluster signals are a well-documented phenomenon in academic research on insider trading: when several executives or directors independently decide to buy or sell at roughly the same time, it often reflects shared private information about the business trajectory (within the bounds of legal trading).

Insighthread generates a cluster signal automatically and surfaces it in both the Insider Trades feed and the News Feed as a distinct event. The signal shows:

* How many insiders participated
* The total shares and dollar value across the cluster
* The time window over which the cluster formed
* The individual transactions that make up the cluster

Look for cluster buy signals, in particular, when a company has recently experienced a sell-off — multiple insiders stepping in to buy at depressed prices is a historically meaningful data point.

## Sector Heat Maps

The **Sector Heat Map** view gives you a macro lens on insider activity across the entire market. Rather than reviewing transactions company by company, the heat map aggregates insider buying and selling by sector and visualizes the net direction as a color gradient — from heavy selling to heavy buying.

Use the heat map to:

* Spot sectors where insider buying has spiked relative to recent norms
* Identify sectors where a wave of insider selling may signal broad caution
* Drill into a sector tile to see the individual companies and transactions driving the signal
* Compare current heat map intensity to the 30-day rolling average to detect emerging trends

The heat map refreshes daily as new Form 4 and Form 4/A filings are processed from EDGAR.

## Buy/Sell Ratio

The **Buy/Sell Ratio** tracks the proportion of open-market purchases to open-market sales for a given company, sector, or the overall market over a rolling window. Comparing the current ratio to the **30-day average** helps you identify when insider activity is meaningfully diverging from its recent baseline.

For example:

* A buy/sell ratio of **3:1** against a 30-day average of **0.8:1** suggests a sudden, unusual surge in insider buying — worth investigating further.
* A ratio that has shifted sharply toward selling at a company with no recent disclosed news may warrant attention before a catalyst becomes public.

The ratio is calculated on open-market transactions only, excluding option exercises and stock grants, to focus on discretionary insider behavior.

<Note>
  All insider transaction data is sourced directly from SEC EDGAR Form 3, Form 4, and Form 4/A filings. Insighthread does not modify, adjust, or editorialize the reported data. Insider transaction tracking and Conviction Scoring are provided for informational and research purposes only and do not constitute investment advice or a recommendation to buy or sell any security.
</Note>

<Tip>
  Focus on **open-market purchases** — transactions where an insider spent their own money at the current market price, not options they received as compensation. This is the purest signal of insider conviction, and it's the transaction type that Insighthread's Conviction Score weights most heavily.
</Tip>


## Related topics

- [How to Track Insider Trading Activity on Insighthread](/guides/track-insiders.md)
- [How to Research Any Public Stock Using Insighthread](/guides/research-a-stock.md)
- [Real-Time SEC Filings Feed for All Public Companies](/features/sec-filings.md)
- [What Is Insighthread? AI Stock Research Explained](/introduction.md)
- [Monitor Market-Moving Events in Your Insighthread Feed](/guides/monitor-events.md)