Thousands of Form 4 filings arrive on SEC EDGAR each week. The vast majority are routine: automatic option exercises, tax withholdings on vesting RSUs, compensation-related grants. A CEO receiving a scheduled equity award and a CEO spending personal capital to purchase shares on the open market are both reported on Form 4, but they carry very different contextual weight. Distinguishing between the two — at scale, across the entire Russell 3000 — is the problem the Akivus significance score is designed to address.
The significance score is a contextual measure. It evaluates how many noteworthy factors are present in a given insider transaction based on publicly available filing data. It does not predict stock price movement, estimate future returns, or express a view on whether a company is over- or undervalued. The score describes the context surrounding a trade — who made it, how large it was relative to their holdings, whether other insiders were doing the same thing, whether it coincided with other SEC filings — and produces a number that reflects how many of those contextual factors are present.
This guide explains what the scoring system measures, how the scoring process works, and what the resulting scores do and do not tell you.
What the Score Measures
The Akivus significance score evaluates each Form 4 transaction across eight factors. Each factor examines a specific dimension of the trade's context using data from the filing itself and from related SEC filings for the same company.
Insider Role
The first factor considers the insider's position at the company. Section 16 of the Securities Exchange Act requires Form 4 filings from three categories of insiders: officers, directors, and beneficial owners of more than 10% of equity securities. Within these categories, different roles carry different levels of proximity to company operations.
A CEO or CFO has broad visibility into the company's financial performance, strategic direction, and operational challenges. A director serving on the audit committee has oversight of financial reporting. A 10% beneficial owner — who may be an activist fund or a founding shareholder — has a substantial economic stake but may or may not have operational involvement. The Insider Role factor reflects these differences. It measures the position of the reporting person, not what that person knows, because what they know is not observable from public filings.
Conviction
Conviction measures the size of a transaction relative to the insider's total holdings in that company's securities. A CEO who owns 500,000 shares and purchases an additional 2,000 shares is making a different-sized commitment than a CEO who owns 10,000 shares and purchases 5,000 more. Both transactions appear on Form 4. Both are open-market purchases. But the second represents a 50% increase in the insider's position, while the first represents a 0.4% increase.
The Conviction factor captures this proportional dimension. It looks at the transaction size as a fraction of the insider's post-transaction ownership, using data reported directly on the Form 4 filing. A larger proportional commitment indicates that the insider is allocating a more significant share of their personal capital or equity stake in a single transaction.
Contrarian Signal
The Contrarian Signal factor examines whether the direction of the insider's trade runs counter to the stock's recent price movement. If a company's share price has declined over a recent period and an insider makes an open-market purchase, the trade moves against the prevailing market direction. Conversely, if the stock has been rising and an insider sells, that trade also moves against the trend.
This factor does not evaluate whether the insider is "right" or "wrong" about the stock's direction. It identifies transactions where the insider's action diverges from recent market sentiment, which represents a factual characteristic of the trade's timing relative to price movement.
Cluster Detection
Cluster Detection identifies whether multiple insiders at the same company filed Form 4 transactions within a close time window. When a single director purchases shares, that is one data point. When the CEO, the CFO, and three independent directors all file open-market purchases within the same week, the pattern is different — multiple people with knowledge of the company's operations independently made the same type of transaction in a compressed timeframe.
The Cluster Detection factor measures the presence and density of this coordinated activity. It examines filing dates across all Section 16 insiders at the same company to identify periods where multiple Form 4 filings overlap. Academic research — including Lakonishok and Lee (2001) in the Review of Financial Studies — has examined the informational characteristics of aggregate insider activity versus isolated transactions.
10b5-1 Plan Status
SEC Form 4 includes an indicator showing whether a transaction was executed under a pre-arranged Rule 10b5-1 trading plan. These plans are established by insiders at a time when they do not possess material non-public information, and they specify in advance the dates, prices, or formulas under which trades will be executed. Once a plan is in place, the insider does not make individual trade decisions — the plan executes according to its predetermined terms.
The 10b5-1 Plan Status factor reflects this distinction. A transaction executed under a 10b5-1 plan was arranged in advance, possibly months earlier, and may reflect long-term financial planning, diversification needs, or estate planning rather than a response to current company developments. A transaction made outside of any pre-arranged plan represents a discretionary decision by the insider at that specific point in time. The scoring system treats this as a meaningful contextual difference.
First-Time Buyer
The First-Time Buyer factor identifies whether a transaction represents the insider's first open-market purchase at the company. Many corporate insiders accumulate their holdings entirely through compensation — stock options, RSU grants, and other equity awards. These insiders may hold substantial positions in their company's stock without ever having spent personal capital to acquire shares.
When such an insider makes their first open-market purchase (transaction code P on Form 4), it represents a shift from passively receiving equity compensation to actively choosing to invest personal funds. This factor flags that transition. It does not evaluate the insider's motivation — only the factual observation that the trade is the first recorded open-market purchase by this reporting person at this company.
8-K Timing
The 8-K Timing factor examines whether a Form 4 transaction occurred in temporal proximity to an 8-K filing by the same company. Form 8-K is the SEC filing that companies use to report material events — executive departures, acquisition agreements, earnings restatements, restructuring plans, and other developments that require current disclosure. These filings mark points in time when material information was formally made public.
When an insider transaction falls within a narrow window around an 8-K filing date, the two events are temporally linked in the public record. The 8-K Timing factor identifies this co-occurrence. It measures a factual relationship between the timing of the insider's trade and the timing of a material event disclosure — it does not infer a causal relationship or imply that the insider traded on the basis of the event.
Cross-Filing Signal
The Cross-Filing Signal factor looks beyond Form 4 to identify whether other types of SEC filings were submitted for the same company around the same time as the insider transaction. The relevant filing types include 8-K filings (material events), 13D filings (activist ownership stakes above 5%), and 13G filings (passive ownership stakes above 5%).
When a Form 4 purchase by a company's CEO coincides with a 13D filing from an activist investor taking a position in the same company, the filing activity paints a different picture than a Form 4 purchase in isolation. The Cross-Filing Signal factor measures the density and type of concurrent SEC filing activity for the same issuer, providing a broader view of the company's disclosure landscape around the time of the insider transaction.
How the Scoring Process Works
The Akivus scoring system uses a two-stage process to calculate the significance score for each Form 4 transaction.
Stage One: Multiplicative Factors
The first stage evaluates factors that interact multiplicatively. Certain combinations of contextual factors compound each other — a first-time purchase by a CEO that coincides with cluster activity from other insiders and runs counter to recent price movement combines multiple noteworthy characteristics in a single event. The multiplicative stage captures these interactions, allowing the score to reflect when several notable factors converge on the same transaction.
Stage Two: Rules-Based Clamping
The second stage applies hard rules that can cap or floor the score produced by Stage One. These rules enforce constraints that should override multiplicative interactions. The most significant example involves 10b5-1 trading plans: a trade executed under a pre-arranged plan may have its score reduced regardless of how many other noteworthy factors are present, because the pre-arranged nature of the trade changes its contextual character. The insider did not make a discretionary decision to trade at that point in time — the plan made the decision for them, potentially months earlier.
Suppressor Priority
When a transaction triggers both factors that would increase the score (promoters) and factors that would decrease it (suppressors), the scoring system gives priority to suppressors. This design principle reflects a conservative approach: if a transaction has characteristics that reduce its contextual distinctiveness — such as being executed under a 10b5-1 plan — those characteristics take precedence over factors that might otherwise elevate the score.
The exact weights, multipliers, and thresholds used in the scoring system are not publicly disclosed. This is a deliberate design decision — publishing precise formulas would enable reverse-engineering of score thresholds, which would reduce the system's usefulness as a filtering mechanism. The scoring methodology page at /methodology provides additional detail on the system's design principles.
What Scores Do Not Tell You
The significance score measures the contextual characteristics of a trade. It does not measure or predict any of the following.
The score does not predict stock price movement. A high significance score does not mean a stock will go up. A low score does not mean it will go down. The score reflects the context of the insider's transaction — their role, the trade's size relative to their holdings, its timing relative to other filings — not a forecast of the company's share price.
The score does not express a view on company value. Akivus does not calculate intrinsic value, estimate earnings, or assess whether a stock is overvalued or undervalued. The score is derived entirely from SEC filing data and the context surrounding the transaction, not from financial modelling or valuation analysis.
Past scoring patterns are not indicative of future results. The scoring system processes each transaction individually based on the factors present at the time of the filing. Historical scores for a particular insider, company, or factor combination do not predict how future transactions with similar characteristics will relate to subsequent market outcomes.
The score does not account for information the insider may possess. The scoring system evaluates publicly available data from SEC filings. It cannot observe, infer, or estimate what material non-public information an insider may or may not have had at the time of the trade. The Insider Role factor reflects the insider's position and its general proximity to company operations, but it does not — and cannot — measure the insider's actual informational advantage.
These limitations are inherent to any system that analyses public filing data. SEC filings tell you what an insider did and when. They do not tell you why.
How Akivus Uses This Data
The significance score appears throughout the Akivus product suite as a tool for navigating the volume of SEC filing activity across the Russell 3000.
Akivus Reports include a detailed insider activity section that presents every Form 4 transaction with its significance score and a breakdown of the contributing factors. The report shows which factors elevated or suppressed the score for each transaction, providing users with full transparency into how the score was derived. This allows readers to form their own assessment of which factors are most relevant to their analysis.
Akivus Alerts notify users when new Form 4 filings are processed. Subscribers can set score thresholds to filter alerts, choosing to receive notifications only for transactions that meet a minimum significance level. This filtering mechanism allows users to reduce the volume of incoming filing notifications to those that match their interest in contextually noteworthy transactions.
Akivus Briefs — company summary pages at /companies/[ticker] — display recent insider activity for each covered company alongside significance scores. Anyone can view the latest Form 4 filings for a company, see the score assigned to each transaction, and understand the factors that contributed to it. Briefs provide a starting point for users who want a quick view of insider activity without purchasing a full report.
The weekly Akivus Newsletter highlights notable insider activity from across the market, using significance scores to surface transactions with the most contextual factors. The newsletter presents these filings as observations about what insiders have done, not as recommendations about what readers should do.
In every product, the score serves the same purpose: it helps users identify which Form 4 filings, out of thousands filed each week, have the most contextually noteworthy characteristics. What users do with that information — how they incorporate it into their own research, analysis, or decision-making process — is entirely their own determination.