SEC Form 4 Transaction Codes Explained

Every transaction on a Form 4 is tagged with a one-letter transaction code that tells you what kind of trade it was. Reading the code correctly is the difference between spotting a genuine conviction buy and misreading a routine payroll event as a signal.

General transaction codes

Code	What it means	Signal read
P	Open-market or private purchase. The insider spent personal money to buy shares.	The single most informative code in the dataset
S	Open-market or private sale. The most common code; often routine diversification or 10b5-1 plan selling.	Weak and ambiguous on its own
V	A transaction reported voluntarily earlier than required.	Neutral

Compensation and benefit-plan codes

Code	What it means	Signal read
A	Grant or award: RSUs, restricted stock, or options granted by the company.	Compensation, not a purchase decision
M	Exercise of a derivative (usually stock options converting into common shares).	Compensation plumbing
F	Tax withholding: shares delivered back to the company to cover the tax bill on vesting equity.	Routine and involuntary - not a bearish signal, despite appearing as a "sale" in many feeds
I	Discretionary transaction inside an employee benefit plan.	Mechanical
C	Conversion of a derivative security.	Mechanical
E, H, O, X	Expirations and exercises of derivative positions (out-of-the-money expiry, in-the-money exercise, etc.).	Mechanical

Other codes

Code	What it means	Signal read
G	Bona-fide gift (to family, trusts, or charity). Since 2023, reportable within two business days.	No price signal
D	Disposition back to the issuer (e.g. in a tender).	Mechanical
W	Acquisition or disposition by will or inheritance.	No price signal
L	Small acquisition under Rule 16a-6.	Rare, minor
Z	Deposit into or withdrawal from a voting trust.	Mechanical
J	Other - a catch-all that must be explained in the filing's footnotes. J can hide anything from a fund distribution to a divorce settlement.	Always read the footnote
K	Equity swaps and similar hedging instruments.	Hedging - worth a closer look
U	Disposition in a change-of-control transaction.	M&A mechanics

Which codes matter as signals?

For signal purposes the hierarchy is simple. Code P purchases are the headline event - an insider voluntarily converting cash into exposure. Clusters of P-buys are stronger still (see cluster buying). Code S sales are weakly informative on their own (see insider selling: signal or noise), while A, M and F are compensation plumbing. InsiderAlpha's feed and scoring engine treat only true open-market purchases as buy signals - browse today's on the recent insider buys page.

Code definitions follow the SEC's official Form 4 instructions. This article is informational and is not investment advice.