Form 4 Transaction Codes Explained: P, S, A, M, F and More
What Is a Form 4 Transaction Code?
Every line on a Form 4 has a one-letter transaction code. It tells you what kind of transaction the insider is reporting: a purchase, a sale, a stock grant, an option exercise, a gift, and so on. The code sits in Column 3 of Table I (shares) and Column 4 of Table II (options and other derivatives).
The code matters more than anything else on the line. A CEO "acquiring" 50,000 shares sounds bullish, but if the code is A it was a stock award from the company, and the CEO did not spend a cent. If the code is P, they bought those shares with their own money. Same number of shares, completely different meaning.
The SEC defines 20 codes in the Form 4 General Instructions. In practice, a handful of them cover almost every filing.
All Form 4 Transaction Codes
| Code | Official SEC meaning | What it usually tells you |
|---|---|---|
| P | Open market or private purchase | Insider bought with their own money. The strongest signal on the form |
| S | Open market or private sale | Insider sold. Many possible reasons, often planned |
| V | Transaction voluntarily reported earlier than required | Added next to another code, not a transaction type itself |
| A | Grant, award or other acquisition under Rule 16b-3(d) | Compensation. No investment decision |
| D | Disposition to the issuer under Rule 16b-3(e) | Shares handed back to the company, for example in a buyback or forfeiture |
| F | Payment of exercise price or tax liability by delivering or withholding securities | Shares withheld to pay tax when stock vests or options are exercised |
| I | Discretionary transaction under Rule 16b-3(f) | Insider-directed move inside a company plan, such as a 401(k) fund switch |
| M | Exercise or conversion of a derivative exempt under Rule 16b-3 | Option exercise from a company plan. Usually routine |
| C | Conversion of derivative security | Convertible or preferred converted into common stock |
| E | Expiration of short derivative position | A written option expired |
| H | Expiration or cancellation of long derivative position with value received | Option or warrant cancelled for value |
| O | Exercise of out-of-the-money derivative security | Rare. Exercising an option that is worth less than its strike |
| X | Exercise of in-the-money or at-the-money derivative security | Option or warrant exercise outside a company plan |
| G | Bona fide gift | Gift to family, a trust or a charity. No signal |
| L | Small acquisition under Rule 16a-6 | Small purchases that qualify for deferred reporting |
| W | Acquisition or disposition by will or inheritance | Estate transfer. No signal |
| Z | Deposit into or withdrawal from voting trust | Administrative. No signal |
| J | Other acquisition or disposition | Anything else. Read the footnote |
| K | Transaction in equity swap or similar instrument | Used with another code, for example S/K. Often hedging |
| U | Disposition in a tender offer during a change of control | Shares tendered in an acquisition of the company |
The categories in the SEC instructions are worth knowing: P, S and V are general codes. A, D, F, I and M are the Rule 16b-3 codes, which cover transactions with the company itself, mainly compensation plans. C, E, H, O and X cover derivatives outside those plans. G, L, W and Z are other exempt transactions, and J, K and U are everything else.
Which Codes Actually Signal Anything?
If you only remember one thing from this guide: P is the code that matters. An open market purchase is the insider choosing to put personal money into the stock at the market price. Nobody makes them do it. That is why academic research on insider trading focuses on purchases, and why the Insider Signal Score is built on them.
S is worth watching, but carefully. Insiders sell for taxes, diversification, a house, a divorce. Many sales are scheduled months in advance in a 10b5-1 trading plan. Since 2023 the Form 4 has a checkbox that marks transactions made under such a plan, and a planned sale says very little about what the insider thinks of the stock today. Our insider selling guide goes through when selling does matter.
A, M, F and D are mostly compensation mechanics. Together they make up the majority of all Form 4 lines, but they describe pay, not opinions. A grant (A) is the board deciding to pay someone in stock. An exercise (M) is often just the insider cashing in options before they expire.
G, W, Z, L and U carry no signal about the stock. They are gifts, inheritances and administrative events.
J needs a closer look. It is the catch-all code, so the footnote decides whether it is meaningful. It can be anything from a transfer between a trust and the insider's own account to a distribution from a fund.
What Does Code F Mean on a Form 4?
Code F means shares were withheld or delivered to pay for something, almost always taxes. When restricted stock units (RSUs) vest, the company typically keeps a slice of the shares to cover the insider's income tax and reports that slice as an F transaction.
So an F line is not a sale in the normal sense. The insider did not choose to sell into the market. It is a tax payment made in shares, and it shows up on most executives' Form 4s a few times a year. F is more common in our data than open market purchases.
What Does Code M Mean on a Form 4?
Code M is an option exercise under a company plan. The insider used their right to buy shares at the option's strike price. You will usually see an M line in Table II (the option going away) and a matching M line in Table I (the shares arriving).
An M on its own is neutral. What happens next is what matters. If the insider exercises and keeps the shares, that is a mild vote of confidence, because they could have sold. If the exercise is followed by an S on the same day, it is usually a cash-out.
What Is the Difference Between Code A and Code P?
Both add shares to the insider's holdings, but only P costs the insider money. A is an award: the company grants stock or options as pay, and the price column is usually zero. P is a purchase at the market price.
This is the most common way insider data gets misread. Screens that count every "acquisition" as buying will show heavy insider buying at almost every large company in the weeks after annual grants. Filtering to code P removes that noise. On InsiderAction.io, the default view only shows P and S for exactly this reason.
What Is the Difference Between Code S and Code D?
S is a sale to the market or to another person. D is a disposition back to the company that issued the shares, for example shares the company buys back from the insider or unvested shares that are forfeited. A D does not hit the open market, and it often has nothing to do with the insider's view of the stock.
Common Code Combinations
Transaction codes make more sense in pairs, because one corporate event often creates several lines on the same Form 4:
- M then F, for vesting RSUs: restricted stock units convert into shares (usually reported as M, after the original A grant) and the company withholds part of them for tax (F). Pure compensation.
- M then S on the same day: options exercised and the shares sold immediately. A cash-out, often under a 10b5-1 plan. On InsiderAction.io this shows as "Sale+OE" so you can tell it apart from an ordinary sale.
- M then F: a "net exercise", where the insider pays the strike price or tax by giving up some of the shares instead of cash.
- S with K (S/K): a sale through an equity swap or similar instrument, often part of a hedging arrangement. Treat it with the same caution as any other planned sale.
- G to a trust: estate planning. The shares usually stay in the family, just under another owner.
How InsiderAction.io Uses Transaction Codes
We store every code from every Form 4, but we lean on them in a few specific ways:
- The default views show P and S only. The dashboard, clusters and most charts focus on open market buys and sells, because that is where the signal is.
- The transaction database can show every code. Choose "All Types" to see grants, exercises, gifts and the rest.
- One row per filing. If a filing has ten S lines at slightly different prices, we show one sale with the total value, so a large sale does not look like ten small ones.
- Sale+OE labels. Sales that come with an option exercise in the same filing are marked, because they are usually planned cash-outs rather than a change of heart.
Quick Reference
- Signal: P (strong), S (weak, check for a 10b5-1 plan)
- Compensation mechanics: A, M, F, D, I
- Derivatives outside company plans: C, X, O, E, H
- No signal: G, W, Z, L, U
- Read the footnote: J, K
For a walk through the whole form, including the tables and ownership columns, see how to read a Form 4.