What is Tradestreaming: Following the insiders

Lots of research has been done over the past couple of decades that focused on legal insider trading.  I make the distinction between executives buying and selling their own stock legally and the type of nefarious activity we read in the news and see in Hollywood.

The distinction is nuanced: insiders (senior corporate managers and large shareholders) can buy and sell their stock as long as they are not basing their decisions on non-public information that, if made public, would affect stock prices.

It turns out that insiders have been doing this for years and really profitably.  You can see a list of the best resources for following insider moves here.

Follow those with better (in)sight

While the research hasn’t necessarily shown that there is a connection between market movement and insider purchases and sells (in the aggregate), insider activity seems to work much better when looking at individual stocks.  It turns out that it works even better when we focus on stocks that are small and mid capitalization companies, have clusters of insider purchases (multiple executives buying around the same time) with larger purchases in dollar terms.

Tradestreaming is all about following the smart money: hedge funds, smart crowds, and certainly, corporate insiders.  Portfolios can be designed to take advantage of this data and profits can be made by mimicking these activities.

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Best investing websites for tracking insider trading

Insider trading — legal buys and sells by corporate insider or large shareholders — is a core tenet in tradestreaming.  Research has shown that by following such moves — under certain circumstances — investors can do really well for themselves.


Investment Intelligence from Insider Trading(book): If this book is the bible of insider trading strategies and research, its author, Professor Seyhun is Moses.  Great research into strategies for following insiders.

Profit from Legal Insider Trading: Invest Today on Tomorrow’s News

The Vital Few vs. the Trivial Many : Invest with the Insiders, Not the Masses

New York Times: More often than not, insiders get it right

Websites to track insider trading

Finviz: I’ve written previously about Finviz’s great stock screener.  They also publish a nice free list of all buys and sells from corporate America here.

Pragmatic Capitalism: Weekly run down on what corporate insider are buying and selling.  Site puts the information in context by comparing trends in insider activity.  Focus is on the macro — not much attention is applied to individual stocks.

CNBC: It’s a shame CNBC’s website doesn’t get more props.  While the cable channel has struggled in getting users to watch their videos on the web, they’ve done a great job with the tools on the site.  One tool, Insider Stock Trading Trends, allows users to get a view — by industry — of who’s buying and selling what.  Also drill down on company stock pages — you can plot insider purchases and sales against stock prices.

GuruFocus: This premium site has a few free lists of insider transactions including all those by CEOs and CFOs.  Paying up to subscribe gives users access to insider cluster buys, insider buys coupled with guru buys, and the triple header — companies buying back their own stock, combined with insider and guru buying.

SECform4.com: Searchable database of all regulatory filings by corporate insiders.

InsiderCow: Nice free site moving towards more to a pay-to-play model. Subscribers can get real-time info as it gets filed, otherwise free offering provides historical inside information.

Old School Value Insider Buy Transaction Screen: filters through stocks to create a free stock screen looking for interesting insider activity

Subscription products with insider strategies

Inside Strategist (Stansberry Research)

Jack Adamo’s Insiders Plus