Buy Penny Stocks Based on Insider Trading Activity

While many investors looking to buy penny stocks immediately envision illegal activity when they hear the term "insider trading" this is not always accurate. Insiders - defined as any corporate executive, director or shareholder with access to information that can affect a company's stock price - are permitted to trade their own company shares provided that they adhere to a rather strict set of regulations governed by the SEC.

Among other things, these regulations dictate that the insider may not trade within certain time periods and that the insider must file all of their trades with the SEC within a timely manner. As such, most insiders announce their trades the same day they take place or within a few days of the transactions. This is all great news for investors looking for tips on when to buy penny stocks and when to sell.

The Insiders Provide Tips on when to Buy Penny Stocks

Since statistics and history show that insiders traditionally do make more money on their stock investing there really isn't any reason for them to take chances by doing anything illegal. Therefore, we can pick up some great tips on when to buy penny stocks just by following what the insiders are doing with their own money. For example, there is any number of reasons for an insider to sell their stock but there is only one reason for them to buy. They believe that the price of the stock will rise. This is a great signal for anyone looking to buy penny stocks themselves.

Buy Penny Stocks Just After the Insiders Do

As a retail investor you will never have all of the information that insiders have but that doesn't really matter. You can still follow their trading activity, pick up some stock tips and if you wish to do so, you can buy penny stocks at the same time or shortly after the insiders do.

All of this information is made public by the SEC. You just need to find it and use it to your advantage. That said, there are usually close to a thousand insider filings per day and most of these trades are not significant. That is where comes in. We evaluate every insider trade filed and match it with the highest moving stocks as well as over a dozen other criteria to help you assess what each trade means. In the end, you won’t always make money on every trade but you also won’t find this information anywhere else. If you’re looking to buy penny stocks that could turn into big winners our free alerts is a great place to start.


Reported on Sep 14, 2011

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