Interactive Brokers Group Insider Trades $2.59 Million In Company Stock

 Thomas Peterffy, Director at Interactive Brokers Group IBKR, as part of a 10b5-1 program, made a large insider sell on September 3, according to a new SEC filing. 10b5-1 programs allow for insiders to give a specified amount of shares to a third party broker that decides how and when to sell the shares.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Friday showed that Peterffy sold 40,000 shares of Interactive Brokers Group at a price of $64.64 per share. The total transaction amounted to $2,585,600.

Following the transaction, Peterffy still owns 6,107,511 shares of Interactive Brokers Group worth $385,078,568.

Interactive Brokers Group shares were down at $63.05 after Wednesday's closing.

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The Importance of Insider Transactions

Insider transactions shouldn't be used primarily to make an investing decision, however an insider transaction can be an important factor in the investing decision.

In legal terms, an "insider" refers to any shareholder who owns at least 10% of a company. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

Important Transaction Codes

Investors prefer focusing on transactions that take place in the open market, indicated in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S indicates a sale. Transaction code C indicates the conversion of an option, and transaction code A indicates the insider may have been forced to sell shares in order to receive compensation that had been promised upon being hired by the company.

Check Out The Full List Of Interactive Brokers Group's Insider Trades.