The Standard & Poor's 500 index fell 2 percent this week. Stock prices dropped following a mix of disappointing earnings and economic news. But at least some of the selloff was likely due to profit taking.
Indeed, that's sure to be among the reasons corporate insiders have been selling. Before this week's slide, the market was up 11 percent for the year.
Key officials of publicly traded companies are required to report any sales or purchases of their company's stock within two days to the Securities and Exchange Commission by filling out Form 4, which can be viewed on the SEC website. This applies to officers and directors, as well as anyone who owns more than 10 percent of a company's stock.
Insiders sold $5.7 billion in March, the highest volume since December, according to TrimTabs Investment Research. Their buying rose to $630 million, up from a record low of $120 million in February — 49 percent of the total was represented by two companies, Herbalife and Tiffany.
It's important to view insider transactions in context. Just because top company executives are selling a large chunk of shares doesn't mean they think the stock is going to tank. Dig further into company filings, and check what other insiders are doing.Associated Press