Monitoring Insider Transactions is based on the theory, that no one buys stock in a company expecting the price to decline.
Directors have a greater understanding of their business, and its future growth prospects. They also have a vested interest in its success.
By monitoring insider buying and selling of shares in a company, traders can extend their scope of research beyond fundamental and technical analysis.
- CEO and CFO know more about a company’s outlook than its directors.
- A lot of buying within a company is a good sign for its future prospects.
- All insiders in small to medium sized companies are up to date on financials.
Monitoring Insider Transactions Conclusion
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