Transaction Code P
Transaction Code P on Form 4 indicates an open market purchase of securities. This is when an insider buys company stock on a public exchange at market prices, representing one of the strongest bullish signals.
The Trader's Take
The Signal
Transaction Code P purchases are among the most reliable bullish indicators. When insiders buy with their own money at market prices, it demonstrates genuine conviction about the company's future prospects.
The Noise
Small Code P purchases that don't meaningfully increase position size may be routine portfolio management rather than strong conviction signals.
Actionable Insights
- 1Focus on Code P purchases that increase the insider's total position by more than 10%.
- 2Compare Code P purchase prices to recent trading ranges—buying near highs is more significant.
- 3Look for multiple Code P transactions from different insiders (cluster buys).
- 4Distinguish Code P from other transaction codes like grants (Code A) or exercises (Code M).
Regulatory Context & Context
Common Misconceptions
Not all purchases are Code P—grants, exercises, and other transaction types use different codes.
Code P specifically means open market purchase, not any purchase transaction.
The transaction code system helps distinguish between different types of insider activity.
Frequently Asked Questions
What does Transaction Code P mean?
Transaction Code P indicates an open market purchase, where an insider buys company stock on a public exchange at current market prices.
Are Code P purchases more significant than other transaction types?
Yes, Code P purchases are generally considered more significant because they represent insiders buying with their own money at market prices, demonstrating conviction.