Transaction Codes Explained

Form 4 uses one and two letter transaction codes to describe what happened. Here is the plain-English glossary for the codes you will actually see in the Blue Collar Picks feed.

By: Beginner Reference 5 min read

The SEC defines a list of transaction codes that appear on Form 4. Most readers only need to recognize five or six of them. The rest are context for tax events, plan administration, or conversions.

The five codes that matter most

P, open-market purchase

The insider used cash to buy shares on the public market. This is the signal most retail readers care about. It means the insider chose, with their own money, to increase their position. P is the strongest of the routine codes.

S, open-market sale

The insider sold shares on the public market. Sales are noisier than buys. People sell for taxes, diversification, scheduled plans, home purchases, and other reasons that have nothing to do with the company. A single sale is rarely a story. A pattern of sales by senior insiders can be.

A, grant or award

Compensation. The insider received shares as part of a stock plan. It is not money out of pocket. Treat A as background, not signal.

F, shares withheld for taxes

When equity vests, insiders often surrender some shares to cover the tax bill. F is mechanical. It does not tell you anything about conviction.

D, disposition to the issuer

The insider returned shares to the company, usually as part of a buyback or a corporate action. Mechanical. Low signal.

Codes you will see less often

  • M exercise of options or conversion of derivative
  • X exercise of in-the-money or at-the-money derivative
  • G gift
  • J other (always check the filing)
  • C conversion of derivative
  • K equity swap
  • V voluntary early reporting

When you see one of these, click through to the underlying SEC filing. The footnotes will explain it in the insider’s own words.

How Blue Collar Picks uses these codes

The default Purchases view filters to P only. The default Sales view filters to S only. The Cluster Buys and Big Buys views also filter to P. The Full Form 4 Ledger shows everything including A, F, D, and the rest, so you can audit what is happening behind the scenes. Most readers will not need the ledger view day to day.

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