Knowledge
Most individuals buy and sell their stocks in the open market. They find the bid and asked price for the shares and execute their trades in the open market.
But insiders have numerous other methods for acquiring or disposing of shares such as private placement, exercise of options.
Some of the transactions are not in the open market and therefore aren’t registered in the trading volume and other statistics.
This is just common sense that if insider can buy their company’s shares at certain percent below the market value directly from the
company without paying commissions and trading costs, they can still make a nice profit even if the stock price moves only sideways
over the next year. Such an advantage obviously influences insiders’ risk/reward calculations and their decision of whether to buy.
|
|
Insider trading is of interest to many different constituencies academics, who are interested in the informational efficiency of prices; security market regulators, who are interested in its effect on fair and orderly markets; and investors, who are interested in using the trades of insiders as a potential source of information when making investment decisions. It is likely that compensation professionals will also become interested in this information as more and more employees are paid with stock and stock options in the firms. We have collected respectable academic researches that proved insiders made excess abnormal return.
Read more |
What is Insider Alpha Return?Academic studies using 10 years worth of US company insider trading data suggest that corporate insiders earn above normal profits on their trades. The findings suggest that company insiders as a group are better informed than the average investors about the prospects for their respective firms. "Insider Alpha Return" reflects our belief that the tracking and reporting of company insider trades can help investors make better informed decisions about security selection and thereby improve their investment returns.Every day, investors have the opportunity to put their money into more than 15,000 US stocks. But such a huge opportunity is also hungely confusing. How do you start narrowing down your investment choices? All investors can potentially increase their returns if they start their stock picking by looking at insider trading flow. It should come as no surprise to anyone that insider trading occurs every day in the stock market. However, it is impossible to screeen all daily insider filings for all listed companies. InsidersLab.com provides an easy to use research tools that allows investors to monitor potential insider investment opportunities and help investors to seek "Insider Alpha" in an effective and systematic manner. Read more |
