Benzinga | Oct 22, 2020 12:04PM EDT

Insider Buys Neurotrope Stock

A Form 4 filing filed with the SEC on Thursday, October 22 showed that Schechter Jonathan bought 2,012 shares of Neurotrope Inc (NASDAQ:NTRP) at $1.10 on Tuesday, Oct 20, and bought 22,988 shares at $1.10 on Wednesday, Oct 21.The transaction moved the executive's stake in Neurotrope Inc. to 2,012 shares. Shares of Neurotrope moved higher by 0.90% from the previous closing price.

Why Insider Transactions Are Important?

Insider transactions shouldn't be used primarily to make an investing decision, however an insider transaction can be an important factor in the investing decision.

When an insider buys stock after an important sell off, that can indicate the insider's faith in the success of the organization. Henceforth, if the stock is bought at new highs, it might be because the insider feels that the stock is not overvalued. Insiders who sell stock at new lows could be anticipating some capitulation moment. If the insider sells at new highs, it could point to the intention to "take some profit" and "lock in a gain."

Transaction Codes To Focus On

Investors prefer focusing on transactions which take place in the open market, indicated in the Form 4 with codes P for purchase and S for sale. If the transaction was an open-market transaction, that means that the insider made a concious decision for the company's stock moving forward.

Transaction codes besides P or S aren't relatively important as they are seldom tied to a decision by the executive. For example, transaction code A is indicative of an insider being forced to sell shares to attain compensation. Moreover, transaction code C indicates the conversion of an option.