form 144 vs form 4 divergence
What it checks
When insiders file paperwork saying they will sell but then don't actually sell much, the stock tends to drift up as the perceived overhang lifts.
Mechanism
Form 144 declares intent to sell, but execution shows up on Form 4. When 90d aggregate Form 144 market value materially exceeds 90d Form 4 sale dollar-value, the overhang is unrealized — typically resolving with a price drift UP as traders who shorted on the headline cover.
Signal rule
rolling-90d Form 144 MV / rolling-90d Form 4 sale-$ >= 3 (or >=5) AND intent >= $1M -> LONG on T+1, hold 10/20/60d.
Data dependencies
daily_pricesAdjusted-close OHLCV for every US-listed ticker; primary price feed.
sec_form_144_filingsSEC Form 144 planned-sale notices, parsed from EDGAR structured filings.
sec_insider_tradesForm-4 insider transactions with role, size, and trade direction.
Expected edge
- Paper alpha
- 50-150 bps over 20-60d (internal)
- Paper window
- T+1 to T+60d
Internal target 50-150 bps over 20-60d on overhang-relief windows.
Related families
form 144 overhang shortInsider / SEC filingsForm 144 notices reveal planned restricted/control-share sales. Large notices can create supply overhang before actual Form 4 execution appears.
form 144 cluster with insiderInsiderConcurrent Form 144 filings by >=2 distinct insiders within 14d are a stronger negative-drift signal than a single filer; multi-insider coordination strips idiosyncratic-liquidity noise and corroborates the planned-exit signal.
insider form4Insider-ActivityLakonishok-Lee 2001, Cohen-Malloy-Pomorski 2012: corroborated insider purchases (Form 4 transaction_code='P') from multiple insiders within a short window are the single most-predictive insider signal — ~6%/year alpha over 6-12 months. Single-insider buys are noisy; cluster buys (3+ distinct insiders, or a single buy > $1M from CEO/CFO) are not. Long for 60 days on cluster buys; long for 30 days on a single $1M+ transaction. Sales are deliberately ignored — they're confounded by liquidity, diversification, and options expiry.
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