When a US company's officers, directors or 10% owners trade the company's own stock, they must report it to the SEC on a Form 4 within two business days. The filing is public, so anyone can see it. Used carefully, it is a useful extra input on top of a Shariah screen. Used carelessly, it is noise.
What is on a Form 4
Each filing lists who traded, their role (CEO, director, 10% owner), the date, the type of transaction, the number of shares, the price, and how many shares they hold afterwards. Sanad reads these filings from the SEC's EDGAR system and shows them in one table you can filter by date, company and insider.
The transaction types that matter
- Buy (code P). An open-market purchase with the insider's own money. Usually the clearest signal, especially when several insiders buy around the same time.
- Sale (code S). An open-market sale. Common and often unremarkable: diversification, taxes, or a plan set months earlier.
- Option exercise (code M). Turning options into shares. Often followed by a sale of the same shares.
- Award (code A) and tax withholding (code F). Pay and paperwork, not a decision about the stock.
- Gift (code G). Shares given away, with no market price.
Reading it without over-reading it
Look at the size relative to the insider's holdings, not just the dollar amount. A director selling 2% of what they own says less than one selling half. Check whether the trade was made under a scheduled 10b5-1 plan, which the filing notes. Look for clusters of buying by several people. And remember the delay: a trade can be reported up to two days late.
Where it fits with halal investing
Insider activity says nothing about whether a stock is permissible. That is the job of the screen: business activity, debt under 30% of market value, and interest income under 5% of revenue. In Sanad each row shows the company's Shariah verdict next to the trade, so you can read both at once, and you can open the screener to filter for compliant companies first.
This is information, not advice. Insiders can be wrong, and a trade is one data point among many.