Is anyone trying to automate the detection of the rampant insider trading that is, no doubt, going on at present?
replies(5):
Currently does it for 1000+ US companies and specifically earnings related filings. By US companies, I mean the ones that are obliged to file SEC filings.
This was the result of almost a year long effort and hundreds of prototypes :)
It currently auto-publishes for 1000 ish US companies by market cap, relies on 8-K filing as a trigger.
e.g. https://www.signalbloom.ai/news/NVDA will take you to NVDA earnings
Would be grateful to get some feedback. Especially if you follow a company, check its reports out. Thank you!
Some examples: https://www.signalbloom.ai/news/AAPL/apple-q1-eps-beats-desp...
https://www.signalbloom.ai/news/NVDA/nvidia-revenue-soars-ma...
https://www.signalbloom.ai/news/JPM/jpm-beats-estimates-on-c... (JPM earnings from Friday)
Hallucination note: https://www.signalbloom.ai/hallucination-benchmark
(1) explicitly illegal insider trading where you trade on MNPI and hope no one notices (e.g., CEO sells shares before bad-news results). I don't think you could track this because usually the person trading is either not a prolific insider (a janitor who sees a draft report in the trash can) and therefore how would you track them OR a prolific insider using some sort of shell (e.g., wife/cousin) [or some combo]
(2) totally legal and ethical "insider trading." The SEC allows insiders to trade, you just have to do it with proper disclosure and in open periods. As noted Unusual Whales and others track this because in theory this is a signal—if mgmt is selling does that mean they no longer believe long-term in this company (irrespective of near-term MNPI)? The flip side obviously is that management cannot eat shares and sometimes wants liquidity for lifestyle reasons.
(3) everything in between—shadow trading, auto selldowns that are turned off if you realize there is good news, etc.
Tracking (2) is as mentioned kind of useful for investors but I would argue not a great signal, tracking (1) is mostly useless because it's a post-hoc analysis (most analyses here are—there was a massive spike in trades before/after a big announcement, or more obviously, a big block trade) and tracking (3) is similar to tracking (2). Btw there is also a lot of academic evidence that insider traders of type (1) overestimate the importance and misestimate the impact of their MNPI—knowing J&J had a drug that passed FDA may not matter if (a) there are twenty drugs that failed and (b) the street assumed it would pass. (none of this is legal or trading advice)