What is SEC Form 4? A plain-English guide
A Form 4 is the document that company insiders in the United States must file with the Securities and Exchange Commission whenever they trade their own company's stock. It is one of the most closely watched public disclosures in markets, because it shows what the people who know a company best are doing with their own money.
Who has to file a Form 4?
- Officers — CEO, CFO, COO and other senior executives.
- Directors — members of the board.
- 10%+ owners — shareholders controlling more than ten percent of a class of stock.
These people are collectively called "insiders" under Section 16 of the Securities Exchange Act.
When is it filed?
Within two business days of the transaction. This matters: by the time you see a filing, the trade already happened. Any serious tool (including Nortis) shows both the transaction date and the filing date so you know how fresh the information is.
What does a Form 4 contain?
- The insider's name and their relationship to the company
- The security traded (usually common stock)
- A transaction code describing the type of transaction
- Number of shares, price per share, and the date
- How many shares the insider owns after the transaction
- Whether ownership is direct or indirect (e.g. via a trust)
- Footnotes — often where the real context lives
The single most important thing to understand
Not every Form 4 is a trading decision. A large share "sale" may be tax withholding on vesting stock. A big "acquisition" may be an annual stock award that cost the insider nothing. The transaction code tells you which is which — see our transaction codes guide for a plain-English breakdown.
Why do investors watch Form 4s?
Open-market purchases (code P) are widely followed because insiders spend their own cash at market prices — academic research has long studied the informativeness of such purchases, particularly when several insiders buy within a short window (a "cluster"). Sales are noisier: insiders sell to diversify, buy houses, or pay taxes, so a single sale usually says little.
Where can I read the original filings?
All Form 4s are public and free on the SEC's EDGAR system. Nortis links every alert back to the original document — always verify the source before acting on any summary, ours included.
Disclaimer: This guide is educational. It is not investment advice, and insider activity does not predict stock prices.