Insider Trading Patterns

49 Pages Posted: 12 Aug 2012 Last revised: 26 May 2017

See all articles by Lee Biggerstaff

Lee Biggerstaff

Miami University of Ohio - Department of Finance

David C. Cicero

Harbert College of Business, Auburn University

M. Babajide Wintoki

University of Kansas - School of Business

Date Written: October 20, 2015

Abstract

We find that corporate insiders trade over longer periods of time when they have a longer-lived informational advantage. Controlling for the duration of insiders' trading strategies, both their sales and purchases predict sizable abnormal returns. Accounting for trading patterns helps sharpen screens for identifying corporate insiders who trade on information. We also find that insiders attempt to preserve their informational advantage to maximize trading profits by disclosing their trades after the market has closed. When insiders report their trades after business hours, they are more likely to engage in extended sequences of trades, and their trades predict larger abnormal returns.

Keywords: insider trading, informed trading, executive trading, trade patterns

JEL Classification: G12, G14, G18

Suggested Citation

Biggerstaff, Lee and Cicero, David C. and Wintoki, Modupe Babajide, Insider Trading Patterns (October 20, 2015). Available at SSRN: https://ssrn.com/abstract=2128127 or http://dx.doi.org/10.2139/ssrn.2128127

Lee Biggerstaff

Miami University of Ohio - Department of Finance ( email )

Oxford, OH 45056
United States

David C. Cicero

Harbert College of Business, Auburn University ( email )

415 Magnolia Ave.
Auburn, AL 36849
United States

Modupe Babajide Wintoki (Contact Author)

University of Kansas - School of Business ( email )

1300 Sunnyside Avenue
Lawrence, KS 66045
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
1,618
Abstract Views
8,412
rank
10,407
PlumX Metrics