# SEC Form 4 transaction codes explained > A Form 4 headline can say “insider bought” or “insider sold” while the filing describes a grant, option exercise, gift or tax withholding. Transaction codes are the fastest way to separate those events. - Canonical page: [https://caymanbot.com/form-4-transaction-codes](https://caymanbot.com/form-4-transaction-codes) - Content type: guide - Last reviewed: 2026-08-19 - Publisher: CaymanBot, LLC ## Quick answer A Form 4 headline can say “insider bought” or “insider sold” while the filing describes a grant, option exercise, gift or tax withholding. Transaction codes are the fastest way to separate those events. ## Key points - **P and S:** Open-market or private purchases and sales are usually the first codes directional researchers inspect. - **A, M and F:** Awards, option exercises and tax-related share withholding need different interpretation. - **Read footnotes:** Codes summarize the event; footnotes, ownership form and remaining holdings provide essential detail. ## Common acquisition and disposition codes **P — Purchase:** An open-market or private purchase of a security. Researchers often give this code special attention because the insider generally commits capital. **S — Sale:** An open-market or private sale. A sale may reflect diversification, taxes, a trading plan or a company view; the code alone does not say why. **A — Grant or award:** Securities acquired through an award, grant or other acquisition from the company, commonly as compensation. **D — Disposition to issuer:** Securities disposed back to the company, potentially through repurchase or another issuer transaction. **G — Gift:** A bona fide gift. It changes direct ownership but is not an open-market trade. **F — Tax or exercise-price payment:** Shares used to pay an exercise price or satisfy tax obligations, often through withholding. ## Derivative and conversion codes **M — Exercise or conversion:** Exercise or conversion of a derivative security, such as an employee stock option. The related common-share acquisition may appear in another table or line. **C — Conversion:** Conversion of a derivative security into another security. **O — Out-of-the-money exercise:** Exercise of an out-of-the-money derivative. **X — In-the-money or at-the-money exercise:** Exercise of a derivative in those conditions. **E — Expiration of short derivative position:** A short derivative position expired. Derivative rows can be economically connected to common-stock dispositions. Reading one line alone may make an exercise-and-sell transaction look like both a large acquisition and an unrelated sale. ## How to research a Form 4 correctly Start with the transaction code, date, price and number of securities. Then check whether ownership is direct or indirect, how many securities remain after the transaction and whether footnotes describe a Rule 10b5-1 trading plan, tax withholding, trust, spouse or other relationship. Open-market purchases coded P can be informative, especially when several insiders buy meaningful amounts relative to their holdings. Sales coded S require more context because insiders sell for many non-directional reasons. CaymanBot organizes the rows for discovery, but the original SEC filing remains the authoritative source. - Do not combine award and purchase codes as though both used insider cash. - Check remaining ownership to understand the transaction’s relative size. - Read footnotes for plans, trusts, indirect ownership and paired transactions. - Look for clusters across several reporting people and filing dates. ## Primary sources - [SEC Form 4 and official transaction-code instructions](https://www.sec.gov/files/form4data.pdf) - [SEC Investor Bulletin: Insider Transactions and Forms 3, 4, and 5](https://www.sec.gov/files/forms-3-4-5.pdf) ## Frequently asked questions ### What does code P mean on Form 4? P indicates an open-market or private purchase of a non-derivative or derivative security. ### What does code S mean on Form 4? S indicates an open-market or private sale. It does not by itself reveal the insider’s reason for selling. ### What does code M mean? M indicates the exercise or conversion of a derivative security, commonly an employee stock option. ### Are Form 4 grants insider buying? A grant coded A is an acquisition, but it is generally compensation or another issuer award rather than an open-market purchase with the insider’s cash. ## Related CaymanBot resources - [Research corporate insider trades without reading filings one by one](https://caymanbot.com/insider-trading-tracker) - [What is a 13F filing?](https://caymanbot.com/13f-filing-guide) - [How congressional trading disclosures work](https://caymanbot.com/congressional-trading-disclosures) - [Track congressional stock trades in market context](https://caymanbot.com/congressional-stock-tracker) Market data, modeled analytics, calculators and public-filing summaries are informational. Verify time-sensitive data and original filings before making decisions.