Inside Scoop : Understanding Stock Insiders

Have you ever wondered who is really behind the scenes in the stock market for alternative data? Spoiler alert! It's not usually the high-profile investors on TV. https://insiderbeta.com/ Enter the fascinating world of stock insiders--those folks with a front-row seat to all the action. We'll peel back the veil and discover what makes stock insiders so interesting.

First of all, what exactly are these "insiders"? We are talking about executives at companies, members of boards, and the largest shareholders. People with non-public access can have a huge impact on a stock’s performance. Imagine having a crystal ball that tells you whether a company's next quarter will be stellar or disastrous. This is what they do.

Now, let me share a quick anecdote. An old friend of mine used to work at a firm in the tech industry where, just prior to launching a new revolutionary product, the CEO acquired a huge amount of stock. Overnight, the stock price skyrocketed! Coincidence? Do you think it's a coincidence? Outsiders are often unable to imagine how insiders have the ability to feel their company's pulse.

It's not as evil as it may sound. In order to avoid unfair advantages, insiders must follow strict rules on when and how they can sell or buy shares. Think of it as playing poker but everyone has to show their cards at certain intervals.

Why is it important to pay attention to insider activity then? Following what insiders say and do could provide useful clues as to a firm's prospects. It could indicate that top executives are optimistic about future developments if they start purchasing shares. On the flip side, if they're selling like hotcakes, maybe it's time to rethink your investment strategy.

We'll add a bit of humor to this: Have you heard "Do as the Romans Do" when in Rome? When investing, you should "watch what the insiders are doing." The advice is not foolproof but it sure beats picking stocks by throwing darts!

The next time that you consider which stocks you should buy or sell to make, you might want to take a look at the actions of those who are in the know. You may just find out what you need!