FormerXBC Inc XEBEQ

Insider Buying vs. Insider Selling

[AlwaysLong683]

Common mantra when considering what insiders are doing: Insiders may sell for reasons other than believing the shares are overpriced or bad news is coming (e.g., They may be short of cash for other ventures or short-term debt obligations either personally or professionally and need to get their hands on cash quickly without taking on debt), but they buy at current market prices for only one reason: They think the shares are undervalued. May not be true in all cases, but many small investors often use this as a tell re. insider activity.

Now there is of course, the matter of stock options. If XBC is currently trading at 2.17 but an insider has stock options that allow them to purchase a number of shares at say, 1.25, this insider may go ahead and exercise those options and thus technically engage in "insider buying", but they may base their purchase on the fact that they are getting shares at a big discount to what the average investor can currently purchase them at on the open market and believe that, even if the shares don't go up in value, they still make a good chunk of money at a purchase price of 1.25. So with insider buying, it's also important to know the price at which the insider purchased the shares.