SEC Form 4 Transaction Codes Explained (P, S, A, M, F and More)

One letter tells you whether an insider trade is conviction or just admin.

Updated June 11, 2026 · ClearOcean Research

The single most useful character on a Form 4 is the transaction code — a letter that tells you what kind of trade just happened. Most "insider bought" alerts ignore it, which is why they so often misfire. Here are the codes that matter.

The conviction code

P — Open-market purchase. The insider bought shares at market price with their own cash. This is the code that carries the most information.

The codes that are not conviction

S — Open-market sale. Shares sold. Often for personal reasons unrelated to the company's outlook.
A — Grant / award. Shares received as compensation. No cash was risked — this is pay, not a vote of confidence.
M — Option exercise. Converting options into shares; usually a compensation event, frequently paired with a sale.
F — Tax withholding. Shares surrendered to the company to pay taxes on a vesting event. Looks like a sale, means little.
G — Gift. Shares given away (e.g., to a trust or charity).
C — Conversion of a derivative security.

The trap: a "P" on a derivative

Occasionally a purchase code appears on a warrant or option in Table II — for example, warrants issued under an executive's employment agreement. The code says "P", but no personal cash bought common stock; it is compensation. Always confirm the security is common stock, not a derivative, before treating a P as conviction.

The bottom line

When you scan insider activity, anchor on one thing: an open-market purchase (P) of common stock. Treat A, M, F, G and most S transactions as background noise. That single filter removes the majority of false "insider buying" signals.

Built for exactly this

ClearOcean only counts what matters — open-market common-stock purchases — and discards the noise (A, M, F, S) before anything reaches you.

See how ClearOcean works →

Frequently asked

What does transaction code P mean on a Form 4?

Code P is an open-market purchase — the insider bought shares with their own money at the prevailing market price. It is generally the most informative code.

What is the difference between codes M, F and S?

M is an option exercise, F is shares surrendered to cover taxes, and S is an open-market sale. None of these carry the conviction of a P purchase.

Sources

U.S. SEC — Form 4 transaction code definitions.

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This guide is educational and informational only — not investment, legal or tax advice, and not a recommendation to buy or sell any security. ClearOcean is a software research service, not a registered investment adviser or broker-dealer. Investing involves risk, including the total loss of capital. Consult a licensed professional.