Do Insiders Cluster Trades with Colleagues? Evidence from Daily Insider Trading

50 Pages Posted: 19 May 2016 Last revised: 11 Dec 2018

See all articles by Dallin Alldredge

Dallin Alldredge

Florida International University

Brian Blank

Mississippi State University

Date Written: December 10, 2018


We explore similarities in insider trading as a proxy for information flows. We observe that corporate insiders cluster trades around those of other insiders at their firm, especially around trades of insiders with whom they work closely. Clustering is greater when informational advantages are larger: during periods of low investor attention, high uncertainty, and high information asymmetry. We also document that clustered insider purchases are followed by abnormal returns in excess of 2% during the subsequent month. Our results are consistent with informed trading, which could result from information sharing among corporate insiders.

Keywords: Herding; Insider Trading; Information Content

JEL Classification: G12, G14, G18

Suggested Citation

Alldredge, Dallin and Blank II, Douglas Brian, Do Insiders Cluster Trades with Colleagues? Evidence from Daily Insider Trading (December 10, 2018). Journal of Financial Research, Forthcoming, Available at SSRN: or

Dallin Alldredge (Contact Author)

Florida International University ( email )

University Park
11200 SW 8th Street
Miami, FL 33199
United States

Douglas Brian Blank II

Mississippi State University ( email )

Mississippi State, MS 39762
United States
(662) 325-5910 (Phone)

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