Insider Transaction Types: The Form 4 Code Reference

Educational content: This page explains the SEC transaction code classifications. It is not investment advice or a recommendation to buy or sell securities. All trading has risk.

What do the Form 4 transaction codes mean?

Every transaction on a Form 4 carries a one-letter code. The code states how the shares changed hands. Code P is an open market purchase with the insider's own money. Code S is an open market sale. Code A is a grant from the company. Code M is an option exercise. Code F is a tax withholding. The rest cover gifts, conversions, buybacks, and retirement plan trades. The code tells you whether the insider chose the trade and whether money changed hands.

The full code table

The codes below appear in the order that a reader meets them.

Code P - open market purchase

The insider bought shares on the open market at the market price. No one gave the insider a discount, and no compensation plan supplied the shares. The insider spent personal money and chose the date.

    
    Transaction Date: 2024-03-15
Code: P
Shares: 50,000
Price: $42.50
Value: $2,125,000

  

Questions that change what this row means:

• How large is the purchase against the insider's existing position?
• Is this the first purchase by this person in years, or one of a regular series?
• Did other insiders at the same company also file a P in the same window?
• Where did the stock trade before the purchase date?

A footnote often states that the shares came from several trades across a price range. That tells you the insider accumulated over days rather than in one order.

Code S - open market sale

The insider sold shares on the open market. Sales carry less information than purchases, because insiders sell for reasons that have nothing to do with the company:

• Diversification away from a concentrated position
• Tax payments on stock compensation
• Personal costs such as a house or tuition
• Estate planning
• The cash leg of an option exercise

    
    Transaction Date: 2024-03-15
Code: S
Shares: 25,000
Price: $42.50
Value: $1,062,500
Footnote: (1) Sale pursuant to Rule 10b5-1 plan adopted 2023-06-01

  

That footnote is the first thing to look for. A Rule 10b5-1 plan fixes the sale months in advance. The insider did not choose the date or the price on 15 March.

What separates one sale from another:

• The share of the position that the sale removes
• Whether a Rule 10b5-1 plan covers it
• Whether several insiders sell in the same window
• Whether the pace differs from this person's history

Code A - grant or award

The company gave the insider shares. No cash left the insider's account. The price column shows $0 or the grant price.

    
    Transaction Date: 2024-03-15
Code: A
Shares: 100,000
Price: $0
Footnote: (1) Annual equity grant per employment agreement

  

Three kinds of grant appear:

A grant reflects the compensation committee's decision, not the insider's view of the stock.

Code M - exercise of a derivative security

The insider converted options into shares. An option carries a strike price. The insider pays the strike price and receives stock. Code M appears in Table II. The resulting shares appear in Table I.

What matters is what the insider does next.

Exercise and sell everything. The insider pays the strike price and sells every share on the same day.

    
    Table II: Code M, 50,000 shares, exercise price $25
Table I:  Code S, 50,000 shares, sale price $42.50
Net shares kept: 0

  

Exercise and keep most of the shares. The insider sells enough to cover the strike price and the tax.

    
    Table II: Code M, 50,000 shares, exercise price $25
Table I:  Code S, 18,500 shares, sale price $42.50
Net shares kept: 31,500

  

The two rows above show the same exercise. The share count in the "shares owned after" column separates them. Options also expire. An exercise close to the expiry date says less about the insider's view than an early exercise does.

Code F - shares delivered for tax or exercise cost

The company held back shares to cover the tax bill or the exercise cost. This is an administrative step, not a market trade.

    
    Transaction Date: 2024-03-15
Code: F
Shares: 3,700
Price: $42.50
Footnote: (1) Shares withheld to satisfy tax withholding obligation

  

Code F follows a vest or an exercise. The withheld amount tracks the tax rate, not a decision about the stock.

Code D - disposition to the issuer

The insider transferred shares back to the company. This happens under a buyback program, an employee stock plan, or the terms of an award.

    
    Transaction Date: 2024-03-15
Code: D
Shares: 10,000
Price: $42.50
Footnote: (1) Shares repurchased by issuer pursuant to employee stock plan

  

Check whether the company has an announced repurchase program. A large disposition from one insider with no such program is unusual and deserves a read of the terms.

Code G - gift

The insider gave the shares away. Charitable foundations and family members are the usual recipients. No cash changes hands, so the price column shows $0.

    
    Transaction Date: 2024-03-15
Code: G
Shares: 50,000
Price: $0
Footnote: (1) Gift to Smith Family Foundation

  

A gift still reduces the insider's reported holding. The recipient and the date are the details worth reading.

Code C - conversion of a derivative security

The insider converted one security into another, such as preferred stock into common stock. The footnote states the ratio and the terms.

    
    Transaction Date: 2024-03-15
Code: C
Shares: 100,000
Price: $0
Footnote: (1) Conversion of Series A Preferred Stock to Common at 1:1

  

Read whether the conversion was mandatory. A maturity date or a company call forces some conversions. The insider elects others.

Code J - other acquisition or disposition

Code J covers transactions that no other code fits. Inheritance, a divorce settlement, a private sale between shareholders, and a transfer out of a trust all use J. The footnote carries the whole explanation. Read it before you draw any conclusion.

Code I - discretionary transaction in a plan

The trade happened inside a company retirement plan, such as a 401(k). The amounts are usually small and follow a contribution schedule.

    
    Transaction Date: 2024-03-15
Code: I
Shares: 500
Price: $42.50
Footnote: (1) Acquisition in issuer's 401(k) plan

  

Code combinations

A single Form 4 often carries several codes. These combinations appear most:

Profitelligence groups filings from the same company into clusters. The 90-day summary on a company page, such as Nvidia or Tesla, shows the net share count and the mix of codes across that window.

How Profitelligence uses the codes

We parse every Form 4 from EDGAR and store the code, the share count, the price, and the footnote text. The application then:

• Separates purchases and sales from grants, withholdings, and plan transactions
• Marks trades that a Rule 10b5-1 plan covers
• Groups filings from one company inside a rolling window into clusters
• Places the transaction dates against the price history for the same period

You can follow one person across every company where that person files through the insider directory, or see the full research page for a company at https://profitelligence.com/company/AAPL.

Common questions

Why do Code F rows appear so often? Code F follows every vest and every exercise that settles in shares. It is an accounting step, so it appears whenever compensation pays out.

What separates Code A from Code M? Code A is a grant. The insider pays nothing. Code M is an exercise. The insider pays the strike price to get the shares.

Can one Form 4 hold several codes? Yes. A Code M row in Table II with a Code S row in Table I on the same date is a common pairing.

Do all insiders use Rule 10b5-1 plans? No. The plans are optional. Many insiders use them to trade around blackout windows, and many trade without one.

Next steps

Read Form 4 Explained for the structure of the filing itself.

Read Insider Trading Basics for the wider background.

Read Reading Opportunity Scores to see how the application ranks activity.

Open the Insider Trading Dashboard to search parsed filings.