are insiders selling their shares because earnings were drastically below estimates and they expect the share price to fall are insiders buying shares because they created a successful new product that will send the share price skyrocketing 
the trading actions of insiders is an indicator of how the stock will perform in the future but before they can buy or sell their shares known as open market transactions they must file the correct paperwork and follow all procedures the process of an open market transactionan open market transaction is simply an order placed by an insider to buy or sell shares according to the rules and regulations set out by the sec the importance of an open market order is that the insider is voluntarily buying or selling shares at or close to the market price there is no special pricing involved in open market transactions insiders must report open market transactions with the sec and include relevant details about the sale or purchase of the shares because the reason for the transaction is given the filings of open market transactions might be used by other investors to gain some perspective on what insiders may believe about the company for example if an insider sells a considerable portion of their shares through an open market transaction the reasons listed with the filing could cause other investors to change their portfolios in response if the reason was simply to take advantage of stock options provided to a high level officer outsider investors will most likely not react in fact more importance is given to the purchase of shares rather than to the sale of shares as a sale could be done for many reasons sec form 4 needs to be filed by an insider before buying or selling shares form 4 lists information such as the name of the insider their relationship to the company how many shares were traded and at what price 2 