The input families behind a market score

A stock score is only as interesting as the data underneath it. Strip away the scale and the presentation and you are left with a few input families, each a different kind of record about a company and the trading in its shares.

Five do most of the work: company filings, political disclosures, options activity, price and volume including off exchange prints, and news. They arrive at different speeds, from different sources, with different blind spots. That last point is the argument for using more than one.

Company filings and insider transactions

This family is the closest thing the market has to a named source. Officers, directors and large shareholders have reporting duties under the securities laws, and the filings they produce are public documents with dates, people and quantities in them.

The workhorse is Form 4. The SEC requires it before the end of the second business day following a transaction that changes beneficial ownership, so the record is current within days. Form 3 is the initial statement when someone becomes an insider, due within 10 days, and Form 5 covers certain deferred or exempt transactions, due no later than 45 days after the financial year ends.

What Form 4 adds is specificity. It names the person and their relationship to the company, gives the share count and price, records whether ownership is direct or indirect, and classifies the transaction with a code. The SEC defines P as a purchase on an exchange or from another person and S as a sale, while A is a grant from the company and F is payment of an exercise price or tax liability out of the securities received. There is also a checkbox for transactions made under a plan intended to satisfy the affirmative defence conditions of Rule 10b5-1.

What it misses is motive. Nobody explains why on a Form 4. A director might be buying because they see something, or diversifying, or meeting a shareholding requirement. Institutional holdings come through Form 13F, filed by managers with at least $100 million in Section 13(f) securities within 45 days of a quarter's end, and the SEC's guidance says short positions should not be included. That makes 13F a delayed, long only snapshot.

Political and government disclosures

Members of the US Congress disclose their personal trades under the STOCK Act, adding a second set of named humans to the data, often with committee exposure to the industries they trade.

A periodic transaction report is required for transactions over $1,000, due by the earlier of 30 days from the filer being made aware of it or 45 days from the transaction. Amounts appear in brackets rather than exact figures, starting at $1,001 to $15,000.

What this family adds is identity and context. What it misses is precision and speed. A bracket is not a number, the disclosure can land a month after the trade, and reports often cover accounts run by a spouse or an adviser. Our guide to tracking politician stock trades covers reading these without over reading them.

Options activity

Options are where positioning shows up with a deadline attached. A filing tells you someone acted. An options position tells you someone has taken a view that expires on a set date at a set price, encoding both size and timing in a way share buying does not.

Volume counts contracts traded during the session, and open interest counts those still outstanding. The Options Clearing Corporation publishes open interest as a daily report, so it is a once a day figure, not a live one.

The gap here is intent. Options data is anonymous. A large call purchase can be a directional bet, a hedge against a short position, or one leg of a spread that looks aggressive alone and neutral as a whole. That is why unusual options activity is better treated as a question than an answer.

Price, volume and off exchange prints

Price and volume are the only continuous inputs. Everything else arrives in lumps when a form is filed or an article published. Price carries no reporting lag and is the baseline almost every other signal gets measured against, since a filing means something different landing into rising volume than into silence.

Volume splits in a way worth understanding. A share of daily trading happens away from the lit exchanges, and FINRA publishes weekly volume figures for alternative trading systems and other off exchange activity, on a two week delay for Tier 1 NMS stocks and a four week delay for Tier 2 NMS stocks and OTC equity securities. That is historical by construction, so anything built on it describes a fortnight ago, not this morning.

What price and volume miss is cause. They record the outcome of decisions without the reason, the blind spot the other families fill.

News and sentiment

News supplies the why. A filing cluster that coincides with a contract award, a regulatory decision or a change of management is a different story from the same cluster in a quiet week, and only the news layer tells you which.

Sentiment scoring, which turns text into a number, is the shakiest input of the five. Language is ambiguous, the same story is syndicated across dozens of outlets and inflates the counts, and tone does not reliably map onto direction. Timing is its own problem, since an article often appears after the market has responded to what it describes. Treated as context, news earns its place. On its own, it mostly measures how much has been written.

Why the combination is the point

Each family fails differently, and that is the useful part. Filings are named but slow. Options are fast but anonymous. Price is continuous but silent about cause. Political disclosures name people and blur amounts. News explains but lags.

Line them up and two things become readable. Corroboration is one: an insider purchase, a rise in call volume and more off exchange prints in one window is a fuller picture than any alone. Disagreement is the other, and often more informative. When options activity is heated and no filings support it, the absence is itself a fact.

None of this makes a combined score a forecast. It makes it a fuller summary of what is currently visible, a point covered further in how AI scores stocks.

How InsiderPulse handles this

InsiderPulse builds its 0 to 100 score from all five families: SEC Form 4 insider filings, US congressional trade disclosures, options activity, dark pool and volume data, prices and news. Contributing signals are shown separately rather than hidden behind the total, so you can see which family is driving a reading. Ask Pulsey answers questions about a score with citations back to the source. Coverage is US listed stocks and ETFs plus crypto, forex and commodities, and ASX shares are not included.

InsiderPulse is a data tool. Nothing on this page is financial advice.