FAQ
Frequently asked questions
Answers to common questions about insider clusters, scoring, Short Radar, AI analysis, and how to interpret signals.
What is a cluster?
A cluster is 3 or more insiders filing SEC Form 4 transactions for the same company within a rolling 5-day window. ClusterSignal requires at least 3 distinct insiders and a minimum $50,000 aggregate value before flagging a cluster. Individual trades below the noise floor ($5K general, $10K VP/Director, $25K CEO/CFO) are excluded.
What does BOUGHT vs SOLD mean?
BOUGHT means the cluster consists of open-market purchases (insiders buying shares with their own money). SOLD means insiders sold shares. These are informational labels — they describe what happened, not what you should do. Both types of clusters appear in the dashboard and have separate scoring logic. Not all sells are bearish; context matters.
What is Short Radar?
Short Radar is a special badge (shown in orange) reserved for sell clusters that pass additional filters: at least $250,000 in coordinated sales, 3+ distinct sellers, and patterns that look out-of-ordinary relative to normal diversification trades. If C-suite insiders (CEO, CFO) are among the sellers, the threshold is lower. Short Radar is not a sell recommendation — it flags activity worth investigating further.
What does the score (0–100) mean?
The score weights six factors: Insider Count (up to 60 pts — 15 per insider), Seniority (up to 42 pts — CEO/CFO score ~3× higher than VP or Director), Capital Deployed (up to 22 pts, scaled by $ amount), Win Rate (up to 22 pts, based on prior 90-day returns), Time Velocity (up to 15 pts — trades in 1 day score much higher than trades spread over 3 weeks), and Filing Speed (up to 12 pts — same-day filers get full credit). Grade A = ≥80, Grade B = ≥50, Grade C = <50.
Why are some small trades ignored?
Transaction floors filter out routine noise. Trades under $5,000 total value are excluded for all insiders. VP and Director trades under $10,000 are excluded. CEO and CFO trades under $25,000 are excluded. This ensures clusters reflect meaningful capital commitment, not token grants, dividend reinvestment, or trivially small purchases that would distort signal quality.
Why do CEO and CFO trades score so much higher?
CEOs and CFOs have the most complete and current view of the business. When they buy with their own money — particularly in amounts exceeding their noise floor — it is one of the strongest signals available in public data. Our seniority scoring reflects this: a CEO insider earns 42 points versus 14 for a VP and 10 for a Director, roughly a 3× multiplier.
What is a 10b5-1 plan and why does it matter?
A 10b5-1 plan is a pre-scheduled trading program an insider sets up in advance to sell shares at predetermined prices or dates. Trades under these plans are routine and do not necessarily reflect current sentiment — the decision was made months earlier. ClusterSignal parses Form 4 footnotes to detect 10b5-1 language. However, *amended* or *modified* 10b5-1 plans are treated as high-conviction trades, since the insider voluntarily changed a pre-set plan, which is unusual and potentially meaningful.
What is the AI analysis?
On each cluster detail page, signed-in users can generate an AI analysis powered by Claude (Anthropic). It produces a 2–4 paragraph plain-English summary covering: what the pattern means in context, what the insiders' seniority suggests about conviction, and what a prudent investor might watch for. Every AI response ends with: "This is not financial advice — insider buying is one data point among many." The analysis is generated fresh on demand.
Is this legal?
Yes. ClusterSignal uses only public SEC EDGAR disclosure data, which is freely available to anyone under federal law. The site is a research tool and does not collect or use insider-only information.
Is this financial advice?
No. ClusterSignal is not financial advice. The information is provided for educational and research purposes only. Always consult a licensed professional before making investment decisions.
Where does the data come from?
All insider transaction data is extracted from SEC EDGAR Form 4 filings. Company context (market cap, P/E, sector, earnings dates, price data) comes from Yahoo Finance. All underlying filings are publicly available at sec.gov, and each cluster has a direct SEC EDGAR link.
How often is it updated?
ClusterSignal polls SEC EDGAR every 5 minutes for new Form 4 filings. Pro users see clusters as soon as they're detected. Free users see data with a 48-hour delay.
What is the 48-hour delay?
The 48-hour delay means free users only see clusters that are at least 48 hours old. This gives signed-in users faster access while still providing a meaningful view for free members to evaluate the product.