Transaction Code F
Transaction Code F on Form 4 indicates a tax withholding transaction, typically when an insider receives shares but has taxes withheld by selling a portion of those shares to cover tax obligations.
The Trader's Take
The Signal
Code F transactions are neutral—they represent tax withholding rather than investment decisions. They don't indicate positive or negative sentiment about the company.
The Noise
Code F transactions are routine tax withholding events and should be ignored when analyzing insider sentiment.
Actionable Insights
- 1Code F transactions are administrative and don't indicate insider sentiment.
- 2When analyzing insider activity, exclude Code F transactions from your analysis.
- 3Code F often accompanies Code A grants or Code M exercises when taxes are due.
- 4The net effect of Code F is typically a small reduction in shares received.
Regulatory Context & Context
Common Misconceptions
Code F is not a sale decision—it's an automatic tax withholding mechanism.
Code F transactions don't indicate negative sentiment—they're routine tax compliance.
The amount withheld via Code F is typically based on estimated tax rates, not investment decisions.
Frequently Asked Questions
What does Transaction Code F mean?
Transaction Code F indicates a tax withholding transaction, where shares are sold to cover tax obligations on grants or exercises.
Should I pay attention to Code F transactions?
No, Code F transactions are routine tax withholding events and don't indicate insider sentiment or investment decisions.