How to Read SEC Form 4

Thanks to a reader, I realized I’ve been making a mistake on how I read the SEC insider transaction Form 4.

How to Read SEC Form 4

The example above is the latest form 4 for Dilliards (DDS).

Overall, the form is very easy to understand. You have the filing person, the date of transaction, the type of security, codes for the type of transaction, the price paid for the security and comments down the bottom.

In the image above, I placed a star next to the transaction code.

My mistake was that I thought “A” stood for “Acquired”, which I also thought to be direct open market purchases. Oops.

Better a slice of humble pie now than later.

So for those unsure of what each transaction code stands for, the official code list from the SEC is below.

Transaction Code Definitions

General Transaction Codes

• P – Open market or private purchase of securities
• S – Open market or private sale of securities
• V – Transaction voluntarily reported earlier than required

Rule 16b-3 Transaction Codes

• A – Grant, award, or other acquisition
• D – Sale (or disposition) back to the issuer of the securities
• F – Payment of exercise price or tax liability by delivering or withholding securities
• I – Discretionary transaction, which is an order to the broker to execute the transaction at the best possible price
• M – Exercise of conversion of derivative security

Derivative Securities Codes

• C – Conversion of derivative security (usually options)
• E – Expiration of short derivative position (usually options)
• H – Expiration (or cancellation) of long derivative position with value received (usually options)
• O – Exercise of out-of-the-money derivative securities (usually options)
• X – Exercise of in-the-money or at-the-money derivatives securities (usually options)

Other Sections 16b Exempt Transactions and Small Acquisition Codes

• G – Bona fide gift
• L – Small Acquisition
• W – Acquisition or disposition by will or laws of descent and distribution
• Z – Deposit into or withdrawal from voting trust

Other Transaction Codes

• J – Other acquisition or disposition (transaction described in footnotes)
• K – Transaction in equity swap or similar instrument
• U – Disposition due to a tender of shares in a change of control transaction