When Insiders Stop Selling

Below is a link to a fascinating piece of academic research on insider buying and selling. The most interesting part of this document is what they found when insiders stop selling. Many people conclude this to be a bullish sign and counter intuitively it may be the exact opposite. It may mean a crash is coming.

Why? Because insiders seem to try and time their selling 6-9 months advance so it looks like they aren’t trying to profit right before the bottom falls out and get sued or prosecuted by the SEC. So if you see insiders selling and then suddenly they stop. Watch out.

When Insiders Stop Selling