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Insider selling often sends signals to the stock market about how executives perceive the value of their company's shares. But be careful about analyzing insider selling without putting it into context. Firstly, we explain the difference between insider selling and insider trading. The latter involves executives who skirt the regulatory mechanisms in place that make sure executives with insider information don't exploit that information advantage. Insider buying clearly shows a bullish viewpoint on the company stock, so does insider selling denote a bearish sentiment? Not necessarily, as the most common reason insiders sell a stock is for diversification reasons. In our piece on insider trading explained, we look at how investors should analyze insider trading, and conclude that the entire thing be taken with a grain of salt in most cases. Generally speaking, insider buying and selling creates extra noise which retail investors just don't need.

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