← Back to Trades · Updated April 2026 · 10 min read

SEC Form 4 Transaction Codes Explained: P, S, M, A, F, and More

Every SEC Form 4 filing includes a single-letter transaction code that classifies the type of trade. Understanding these codes is essential for filtering meaningful insider activity from routine corporate compensation events. This guide covers every transaction code you will encounter, ranked by their informational value.

High-Signal Transaction Codes

These codes represent discretionary, voluntary decisions by insiders and carry the strongest informational signals.

P — Open-Market Purchase

The most important code for investors. P indicates that the insider bought shares on the open market using their own money. This is a purely voluntary action — nobody requires them to buy — and it represents genuine conviction that the stock is undervalued. Open-market purchases by senior executives are the foundation of virtually all insider trading research.

S — Open-Market Sale

The insider sold shares on the open market. While less predictive than purchases (insiders sell for many routine reasons), open-market sales without a 10b5-1 plan flag still carry informational weight — especially when multiple insiders sell simultaneously. Always check for the 10b5-1 flag before interpreting an S transaction.

Moderate-Signal Transaction Codes

M — Option/Warrant Exercise or Conversion

The insider exercised stock options or converted derivative securities into common stock. On its own, M is not particularly informative — it often reflects routine compensation activity, especially when options are nearing expiration. However, the disposition of those shares matters: if the insider exercises and holds, that is mildly bullish. If they exercise and immediately sell (M followed by S on the same date), it is typically just a liquidity event.

C — Conversion of Derivative Security

Similar to M, but specifically for convertible securities (convertible bonds, preferred stock, etc.) rather than options. Low informational value in most cases.

Low-Signal Transaction Codes

These codes represent non-discretionary or compensation-related activity. They should generally be filtered out of insider trading analysis.

A — Award or Grant

The insider received shares as part of an equity compensation plan (RSUs, stock awards, performance shares, etc.). This is not a voluntary trade — the company granted the shares per a pre-existing compensation agreement. Zero informational value for predicting stock direction.

F — Payment of Exercise Price or Tax Liability via Share Withholding

Shares were withheld (i.e., effectively sold) to cover tax obligations from vesting or exercise events. This is an automatic, non-discretionary disposition. The insider did not choose to sell — the company withheld shares to pay the tax bill. Treating F transactions as bearish selling is one of the most common beginner mistakes.

G — Gift

The insider gifted shares to another party (often a family trust, charitable foundation, or heir). Not a sale and not driven by views on stock valuation. Occasionally, large gifts near price peaks can be coincidental with bearish insider sentiment, but this is speculative.

D — Disposition to the Issuer

Shares returned to the company, often as part of a share repurchase program or forfeiture of unvested shares. Not a market transaction.

J — Other Acquisition or Disposition

A catch-all code for transactions that don’t fit other categories. Can include inheritances, court-ordered transfers, or other miscellaneous events. Always check the footnotes on a J transaction — the details vary widely.

W — Expiration of Derivative

Options or warrants expired unexercised. Indicates the insider let the derivatives lapse, usually because they were out of the money. Mildly negative but rarely actionable.

Table I vs. Table II

Form 4 has two tables. Table I reports transactions in non-derivative securities (common stock). Table II reports transactions in derivative securities (options, warrants, convertibles). The same transaction codes apply to both tables, but the context differs:

• A P in Table I = bought common stock on the open market (high signal).
• An A in Table II = granted stock options (no signal).
• An M in Table II + an S in Table I on the same date = exercised options and sold the shares (cashless exercise — low signal).

The 10b5-1 Plan Flag

In addition to transaction codes, Form 4 includes a checkbox indicating whether the trade was made pursuant to a Rule 10b5-1 trading plan. Pre-scheduled trades under 10b5-1 plans are set up months in advance and execute automatically regardless of the insider’s current views. Transactions flagged as 10b5-1 should be heavily discounted in your analysis.

Quick Reference Summary

Act on: P (open-market purchase)

Analyze carefully: S (open-market sale, check 10b5-1 flag)

Usually ignore: M, A, F, G, D, C, J, W