How to Read SEC Form 4: Tables, Transaction Codes, and Footnotes

Reading an SEC Form 4 comes down to five things: who filed it, what role they play at the company, what the two transaction tables show, what the letter codes mean, and what the footnotes explain. Learning how to read SEC Form 4 well is mostly a matter of knowing where to look in what order, because the form itself is short and standardized. Every filing follows the same layout under Section 16(a) of the Securities Exchange Act of 1934, and must be filed within two business days of the transaction by officers, directors, or holders of more than ten percent of a company’s equity securities.¹

Where To Find the Filing

Form 4 filings live on the SEC’s EDGAR database. Search by company name or ticker and filter for Form 4, or search by a reporting person’s name to follow one executive across companies.² Results run in reverse chronological order, so the newest transactions surface first.

The Header Boxes

Six numbered boxes across the top of the form tell you who filed, for which company, and when.¹

Box 1 holds the reporting person’s name and mailing address, usually a corporate one.
Box 2 identifies the company and its ticker.
Box 3 shows the earliest transaction date being reported. That date starts the two-business-day filing clock.
Box 4 is blank on original filings; on an amendment, it shows the date of the original.
Box 5 marks the filer’s relationship to the company: Director, Officer, 10% Owner, or Other, with a line for a specific title like Chief Financial Officer.
Box 6 indicates whether the filing is by one person or by more than one jointly.

Box 5 does more work than it looks like it does. A purchase by a CEO reads differently from a purchase by a passive ten-percent holder who sits on no committees, because the role tells you how close the person is to actual decisions. There is also an exit box on the form for a filer’s final report when they leave the company or otherwise stop being subject to Section 16 reporting.³ Some reporting obligations can persist for a period after departure, so a former insider may still appear in filings for a while.

Table I: Common Stock and Other Non-Derivative Securities

Table I is where most readers should spend their time. Each row records a single transaction in a straightforward security like common or preferred stock.¹ The columns:

Column 1 names the security, typically “Common Stock.”
Column 2 is the transaction date. Column 2A shows a “deemed execution date” when the legal trigger for reporting differs from the trade date, and is blank on most filings.
Column 3 carries the transaction code, a single letter explaining how the trade happened.
Column 4 gives the number of shares, whether they were acquired (A) or disposed of (D), and the price per share. This is the row that answers the basic question: buy or sell, how many, at what price.
Column 5 shows total holdings of that security after the reported trade. A large sale that leaves almost nothing behind reads very differently from a trim off the top of a much larger position.
Column 6 marks ownership as D (direct, in the insider’s own name) or I (indirect, through a trust, LLC, family member, or retirement plan).
Column 7 explains the indirect arrangement when Column 6 shows I, with entries like “By Spouse” or “By Revocable Trust.”

One quirk worth knowing: small acquisitions of $10,000 or less in market value can be deferred to the annual Form 5 filing, as long as the insider doesn’t sell shares of the same class within six months.⁴ The absence of a Form 4 for a minor purchase does not necessarily mean the insider missed a filing.

Table II: Options, Warrants, and Other Derivatives

Table II records transactions in derivative instruments: stock options, warrants, convertibles. These are rights to acquire shares at a set price, not shares the insider currently owns.¹ The table is wider than Table I because derivatives carry more moving parts:

Column 2 shows the conversion or exercise price. Compare it to the current market price to see whether exercising would be immediately profitable.
Columns 3 and 4 mirror Table I: the transaction date and the transaction code.
Column 5 is the number of derivative securities acquired or disposed of.
Columns 6 and 7 give the date the derivative becomes exercisable and its expiration date. When expiration is close and the exercise price sits below the market, expect action.
Columns 8 and 9 identify the underlying security and the number of shares that would result from full conversion.

The two tables often tell a linked story. When an insider exercises stock options, Table II shows the derivative disappearing while Table I shows an equal number of common shares arriving. If Table I then shows those shares being sold the same day, the exercise was almost certainly a cash-out rather than a bet on the stock. Reading the two tables together is what separates a real signal from a mechanical one.

What the Transaction Codes Mean

The single letter in the transaction-code column is the interpretive key to the whole form. It tells you how the shares changed hands, and not every code carries the same weight.⁵ The ones you will see most often:

P is an open-market purchase. The insider spent personal money to buy shares in the market, which is the strongest bullish signal on the form because it involves real financial risk with no corporate subsidy.
S is an open-market sale. It can signal declining confidence, or it can reflect routine diversification, tax planning, or estate planning.
M is the exercise or conversion of a derivative, usually tied to a compensation arrangement rather than a market call.
A is an award or grant of equity compensation. No cash changed hands, so it carries no directional signal about the insider’s views.
F is a surrender of shares back to the company to cover taxes on a vesting event or option exercise. Mechanical.
G is a bona fide gift. It reduces holdings without implying a negative outlook.
J is the catch-all “other” code. When a J appears, go straight to the footnotes, because the SEC requires the filer to explain what actually happened.

P and S deserve the closest look. A CEO putting personal money into open-market shares means something different from the same CEO receiving a scheduled equity grant coded A. Many investors filter EDGAR specifically for P-coded transactions for exactly that reason.

Direct vs. Indirect Ownership

Column 6 in both tables labels each holding D for direct or I for indirect.¹ Direct shares sit in the insider’s own account. Indirect shares are held by someone or something else, such as a spouse, a family trust, a limited partnership, or a 401(k), while the insider retains a beneficial interest. Column 7 spells out the specific arrangement.

This distinction matters because some insiders keep the majority of their stake through trusts or LLCs. If you only glance at direct holdings, you will understate their real exposure to the stock and misjudge the size of any trade relative to their overall position.

Footnotes and the 10b5-1 Checkbox

Superscript numbers scattered through the tables point to an “Explanation of Responses” section below. These footnotes are easy to skip and often carry the most useful context:

Weighted average prices. When shares were sold at multiple prices through the day, the table lists a single average and the footnote breaks out the range.
Vesting schedules. For restricted stock or options, footnotes describe when additional shares vest, which gives you a timeline for future transactions.
Conditions or limitations. Some transactions are contingent on performance milestones or board approval, and the footnote is where that shows up.

Since 2023, Form 4 also carries a mandatory checkbox showing whether the transaction was executed under a Rule 10b5-1(c) trading plan.⁶ These plans are set up in advance, while the insider does not possess material nonpublic information, and they schedule future trades. When the box is checked, the filer must also disclose the plan’s adoption date, so you can see how far ahead the trade was arranged.⁷

Under current rules, directors and officers who adopt a 10b5-1 plan face a cooling-off period before the first trade can execute. That period is the later of 90 days after adoption or two business days after the company files quarterly earnings covering the quarter of adoption, capped at 120 days.⁸ The delay exists to prevent an insider from setting up a “plan” right before news breaks and then pointing to the plan as cover.

A Reading Order That Works

Once you know the layout, a Form 4 takes about two minutes to read. Start at Box 5 to see who the insider is and what role they hold. Move to Table I, Column 4 to see what was bought or sold and at what price. Check the transaction code to tell a deliberate market move apart from routine compensation activity. Look at Column 5 for what the insider still holds afterward. Check Column 6 and 7 for indirect holdings you might otherwise miss. Then read every footnote, and note whether the 10b5-1 box is checked. The form is designed to be mechanical, which makes it dry to read but easy to compare across filings once you have seen a few.

One boundary worth flagging: Form 4 is only part of the Section 16 picture. Form 3 establishes the baseline holdings when someone first becomes an insider, and Form 5 captures certain year-end items that were exempt from immediate reporting. If you are trying to reconstruct an insider’s full position over time, all three form types belong in the search.

1
U.S. Securities and Exchange Commission. Form 4 Template and Instructions
2
U.S. Securities and Exchange Commission. Search Filings
3
SEC.gov. Form 4 Statement of Changes of Beneficial Ownership of Securities – General Instructions
4
eCFR. 17 CFR 240.16a-6 – Small Acquisitions
5
SEC.gov. Ownership Form Codes
6
SEC.gov. Final Rule – Insider Trading Arrangements and Related Disclosures
7
U.S. Securities and Exchange Commission. Insider Trading Arrangements and Related Disclosures
8
SEC.gov. Rule 10b5-1 – Insider Trading Arrangements and Related Disclosure