It is well established by empirical research that company insiders realize significant abnormal profits by trading their own company’s stock.
Sattar Mansi, Lin Peng, Jianping Qi, and Han Shi, authors of the study “Investor Attention and Insider Trading,” published in the August 2025 issue of the Journal of Financial and Quantitative Analysis, investigated a novel connection between retail investor attention and insider trading patterns.
They hypothesized that company insiders trade the company’s stocks to take advantage of the mispricing generated by retail investors. Their findings expose how insiders strategically time their trades around periods of heightened or diminished retail investor attention, creating a previously unidentified form of opportunistic trading behavior.
This post originally appeared at Morningstar.