DD on insider selling stock
I realise how unsettling it is to hold stock or call options and then see a fairly sizeable insider sale of the underlying asset.
My only 2 cents before you hit your panic button is to go back to the insider sale history and check;
1. Is there a trend to insiders selling before ER?
2. Who is selling and what is the value of the sale size?
3. Was there an associated event that may have trigger the sale?
One of the biggest pay vehicles for senior folks in a company (and tenured people too) is having shares allocated as part of their compensation. If people don't cash out when they can (or in most cases they actually need to sell to get money for something they hope to do/buy), they stand to lose a lot of money.
At the very same time, they are audited to not sell stock if they are privy to some bad news that is not publically revealed yet (they could be in very serious trouble if they sell before the shares tank on news kept secret).
The point I’m hoping to make is to not associate all insider sale as a doom and gloom situation. If you peel a couple more layers of that onion, you’ll be able to rationalize the sale or assert your own intuition of perhaps getting out of the trade.
More experienced traders will have so many brilliant tips around this. I’ll hope for some to share what they do when insiders sell stock they hold.
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goodfortune : No worries much… ER will be good
73372627 : I agree with you at: "I’m hoping to make is to not associate all insider sale as a doom and gloom situation."
I was to look for insiders for AVGO and none of the sells was something to worry. I will explain in which category was.
Unfortunately, even among those informative trades, it is often expected that insider sells will outweigh insider buys.
This is because stock options/grants/awards/etc are built into the compensation packages of many insiders, hence they tend to build significant ownership of shares in the company.
Many insiders choose to cash out some of the shares they own over time, for various reasons ranging from diversification to personal needs. Therefore you will find that stock sales exceed stock buys for the majority of companies.
stockmarkettec : As far as Insider trading goes,The main ones you want to keep an eye on are the top brass ie: CEO, CFO, Director, president and other top company executives. You can look-up their track record to see if there is abnormal trading going on.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
73372627 stockmarkettec : I agree. Is just to see what kind of transactions was.
In June in general and apply to NVDA, TSLA and AVGO this year was option, automatic sell and disposition. I can give by name and quantity.
The biggerst problem it is with this crazy bios pseudo trading sites drive for the moment by this starting generative AI with directional response.
My suggestion it is be caution on Benzina and Yahoo at this moment for theyrs outcome from this new AI.