Signal Methodology
DisclosureSignals converts raw SEC and Congressional filings into a single 0–100 signal score. Higher scores mean the transaction is more likely to be material and non-routine.
Data Sources
Insider purchases, sales, grants, and exercises reported by officers, directors, and 10% owners.
How Form 4 filings work →Stock transactions disclosed by members of the U.S. House and Senate.
How Congressional trades work →Quarterly institutional holdings for tracking smart-money positioning.
How 13F filings work →How Form 4 Trades Are Scored
Each Form 4 transaction starts at 0 and earns points based on the factors below. The final score is clamped between 0 and 100.
1. Transaction Type
| Code | Meaning | Points |
|---|---|---|
| P | Open-market purchase | +30 |
| A | Grant or award | +20 |
| M | Exercise + hold | +15 |
| S | Open-market sale | +10 |
| G | Gift | +10 |
| F | Tax withholding | -10 |
2. Insider Role
| Role | Points |
|---|---|
| CEO / CFO | +25 |
| COO / President / Chairman | +20 |
| Director | +15 |
| Officer | +10 |
| 10% Owner | +5 |
3. Trade Size
Dollar value = shares × price per share.
| Dollar Value | Points |
|---|---|
| ≥ $1,000,000 | +20 |
| ≥ $500,000 | +15 |
| ≥ $100,000 | +10 |
| ≥ $50,000 | +5 |
| Any positive amount | +2 |
4. Share Count
| Shares | Points |
|---|---|
| ≥ 10,000 | +10 |
| ≥ 1,000 | +5 |
| ≥ 100 | +2 |
5. Cluster Buying Bonus
When multiple insiders buy the same issuer within a 5-day window, it may reflect broader shared decision-making among management. The cluster bonus is added on top of the base score.
| Cluster | Bonus |
|---|---|
| 3+ senior insiders (CEO/CFO/COO/President/Chairman) | +20 |
| 2 senior insiders | +12 |
| 3+ any insiders | +8 |
| 2 any insiders | +5 |
6. Noise Penalty
Routine transactions are flagged as noise and penalized. Noise filings do not generate alerts.
- 10b5-1 plan trades
- Automatic / scheduled transactions
- Tax withholding or vesting
- RSU grants and option exercises
- Gifts and inheritance
7. Purchase After Long Silence
When an insider returns to buy after a long quiet period, the transaction is less likely to be part of a recurring schedule and may reflect a more deliberate decision.
| Silence | Bonus |
|---|---|
| ≥ 12 months since last purchase | +15 |
| 6–11 months | +8 |
| 3–5 months | +4 |
8. Size vs. Insider's Own History
A buy that is unusually large relative to that insider's typical purchase size is more meaningful.
| Ratio to median prior purchase | Bonus |
|---|---|
| ≥ 5× | +15 |
| 2–4.9× | +8 |
| 1.5–1.9× | +4 |
9. Position-Size Increase
Buying enough shares to materially increase an insider's stake means a larger amount of personal capital is tied to the position.
| Increase in position | Bonus |
|---|---|
| ≥ 100% (doubled) | +15 |
| 50–99% | +10 |
| 25–49% | +5 |
10. Discretionary (Non-10b5-1) Purchase
Pre-scheduled 10b5-1 plan trades are routine. A discretionary open-market purchase is a stronger signal.
| Condition | Bonus |
|---|---|
| Open-market purchase (P) with no 10b5-1 / automatic language | +10 |
How to Interpret the Score
The score band describes how many signal criteria a transaction meets and how unusual it is. It does not rate the investment merits of any security.
| Score | Meaning |
|---|---|
| 80–100 | Meets multiple strong signal criteria. Typically a large purchase by a senior insider, often with cluster support. |
| 70–79 | Meets several signal criteria. An unusual purchase that may be worth monitoring. |
| 50–69 | Moderate. Meets some criteria but lacks one or more strong factors. |
| 0–49 | Low signal. Usually routine grants, small trades, or sales. |
Observed Data (What the Score Tracks)
DisclosureSignals is a disclosure-monitoring tool. The examples below describe what the score observes, not investment outcomes.
filings scored against the same published criteria
of scored filings qualify as high-signal (80–100) in a typical 90-day window
clamped scale, same components across every scored filing
The score is deterministic: two filings with identical disclosed characteristics receive identical scores. We publish the exact components above so you can verify any score by hand. A historical outcome study (forward-looking price behavior after high-score filings, with sample sizes and limitations) is planned once enough post-notification observation windows have accumulated; it will be published here with its methodology.
Roadmap Indicators
Additional indicators under evaluation:
- Buy after significant price drop — "blood in the streets" insider buying
- Congressional cluster buying — multiple members buy the same stock
- Short-interest context — high short float + insider buying
- Sector/industry cluster buying — multiple companies in the same industry
Signal Score Disclaimer
The Disclosure Signal Score measures characteristics of a reported transaction using predefined criteria. A higher score does not represent expected investment performance, a bullish rating, or a recommendation to buy, sell, or hold a security.
Data Timing
DisclosureSignals processes each disclosure after it becomes publicly available. Every alert should be read as a notice about a newly available public filing, not a contemporaneous report of a newly executed trade. The general sequence is: underlying transaction → public filing/disclosure → DisclosureSignals processing → user notification.
- Form 4: Corporate insiders generally must report applicable transactions within two business days after the transaction occurs. A Form 4 alert is about a newly available public filing, not necessarily a newly executed trade.
- Congressional transactions: Members of Congress may report transactions on periodic disclosures that become public weeks after the transaction. Congressional alerts should never be treated as contemporaneous trade alerts.
- Form 13F: 13F filings reflect historical institutional holdings and may be filed up to 45 days after quarter end. 13F data is institutional disclosure intelligence, not a record of current institutional trading activity.
Not Investment Advice
Signal scores are a quantitative filter, not a recommendation. Nothing on DisclosureSignals is investment, legal, or tax advice, and nothing here is a recommendation to buy, sell, or hold any security. Always do your own research and verify material information against the original filing. Insider, Congressional, and institutional activity does not guarantee or predict future market performance. Insider activity is one input among many.