Insider trading is the act of trading stocks using non-public, material information, giving an unfair advantage over other investors—something regulators like the U.S. Securities and Exchange Commission prohibit. However, corporate executives can legally trade their company’s stock if disclosed. But do these insiders actually beat the market? In this data-driven breakdown of insider trading statistics (2026), we’ll dive into the numbers to find out.
If anyone should have an edge in the stock market, it’s corporate insiders—and the data backs that up. Insider buying has historically generated ~6%–10% in excess annual returns above the broader market, though more recent data suggests the edge may be smaller and less consistent.
That means… if the S&P 500 returns ~8% annually, insider buying has historically been associated with total returns in the ~10%–14%+ range, though results vary widely depending on timing and trade quality.
That’s huge!
That’s why high-profile traders—from politicians like Nancy Pelosi, Marjorie Taylor Greene, Dan Crenshaw, Josh Gottheimer, and Ro Khanna to infamous figures like Martha Stewart and Albert Wiggin—draw so much attention.
The big question is: are these insiders actually beating the market, or is the advantage overstated?
In this data-driven breakdown of insider trading statistics (2026), we’ll dig into the numbers to find out.
Key Insider Trading Statistics 2026
- Over 70% of insider purchases are followed by positive returns over the next 6–12 months, according to multiple academic studies.
- Insider buying has historically generated ~6%–10% excess annual returns, though more recent estimates suggest a smaller edge of ~2%–6% alpha
- The S&P 500 averages roughly ~8% annual returns, meaning insider strategies can reach ~10%–14%+ total returns in favorable conditions
- Over 60%–70% of insider purchases are followed by positive returns over the next 6–12 months
- Insider purchases tend to outperform insider sales by roughly ~4%–5% annually
- Stocks with recent insider buying can generate ~3%–7% abnormal returns over 3–12 months
High-Conviction Signals
- Cluster buying (multiple insiders) has been linked to ~5%–15% abnormal returns over the following 6–12 months
- Large insider purchases outperform smaller trades by ~2%–5% over 1 year
- Open-market purchases outperform compensation-based trades by ~4%–8% annually
- Insider buying after 20%+ price declines tends to produce stronger forward returns than buying during uptrends
Where Insider Trading Works Best
- Small-cap insider buying can generate ~8%–12% excess annual returns, vs. ~2%–4% in large caps
- Small-cap insider trades often outperform by ~5%–10% over the next 6–12 months
- Insiders trading within their own industry outperform by ~3%–7% vs. cross-industry trades
Timing & Execution Reality
- Insider trades are disclosed within ~2 business days (corporate insiders) or up to 45 days (politicians under the STOCK Act)
- An estimated 30%–50% of abnormal returns occur before or shortly after disclosure, reducing the edge for retail traders
- Most insider-driven outperformance occurs within 3–12 months, with early gains often in the first 3–6 months
Limitations & Reality Check
- Insider activity explains <5% of total stock return variation
- Insider alpha has declined over time as markets become more efficient
- Transaction costs, taxes, and delays can erode 30%–50% of theoretical profits
- Insider selling shows little to no consistent predictive value
👉 Trader insight: Insider trading signals do have predictive power—but they are far from perfect. It’s true that you can use platforms like TrendSpider to follow insider trades. But that does not mean you’ll achieve the same results as insiders, who often have greater purchasing power and a higher risk tolerance than the average retail trader.
What Counts as “Insider Trading”?
Before diving into performance data, it’s important to separate legal insider activity from the kind that gets people fined—or jailed.
Legal Insider Trading (What We’re Analyzing)
- Executives, directors, and major shareholders can legally buy and sell shares of their own company
- These trades must be publicly disclosed, typically within 2 business days via filings with the U.S. Securities and Exchange Commission
- Thousands of these transactions are reported every year, creating a rich dataset used in academic research and trading strategies
👉 This is the data behind most insider trading statistics—and what we’ll focus on throughout this article.
Illegal Insider Trading (Where the Line Gets Crossed)
Illegal insider trading happens when someone trades based on material, non-public information—giving them an unfair advantage over the market.
Historically, this has led to some high-profile cases:
- Martha Stewart was convicted in 2004 (for obstruction-related charges tied to insider trading)
- Albert Wiggin, a bank CEO in the 1930s, secretly shorted his own company’s stock during the Great Depression, profiting while shareholders lost
👉 These cases helped shape modern insider trading laws and enforcement.
The Political Gray Area: Congress & Trading
Here’s where things get more controversial… Members of Congress have historically been allowed to trade individual stocks, even while having access to sensitive policy information.
- The STOCK Act requires disclosure of trades within 45 days
- However, studies have shown that some lawmakers have achieved market-beating returns, fueling public skepticism
This is why traders often track the activity of politicians like:
- Nancy Pelosi
- Marjorie Taylor Greene
- Dan Crenshaw
- Josh Gottheimer
- Ro Khanna
👉 Trader insight: Platforms like TrendSpider make it easy to track insider and politician trades from names like Nancy Pelosi or Dan Crenshaw in real time, but the real edge isn’t blindly copying—it’s adding context, like trade size, clustering, and timing around catalysts, to turn insider activity into a high-conviction confirmation signal within your broader strategy.
What’s Changing in 2025–2026?
There’s growing momentum to ban or restrict congressional trading altogether.
- Bipartisan proposals aim to force lawmakers to use blind trusts or ban individual stock trading entirely
- At the same time, regulators are increasing scrutiny around prediction markets and political event trading, raising new questions about information advantages
- In May 2026, the U.S. Senate unanimously passed a rule barring senators from trading on prediction markets effective immediately.
In short… The definition of “insider advantage” is evolving beyond just corporate executives. While today, it is legal for many politicians and members of Congress to trade, the rules are becoming stricter.
Why This Matters for Investors
It’s true that not all insider trading is illegal—but not all insider activity is useful.
- Legal insider trades, like Elon Musk disclosing buying shares of Tesla’s stock… that create valuable signals
- Whereas, illegal insider trading distorts markets—and is aggressively prosecuted
- And yet, political trading sits in a gray area that’s rapidly changing
The remainder of this article focuses entirely on legal, disclosed insider trading data—and whether it actually leads to market outperformance.
How Much Do Insiders Outperform?
Multiple decades of research show that insider trading does produce statistically significant excess returns, but the magnitude is often overstated.
Older academic studies found insider buying could generate roughly 6%–10% annual outperformance, while more recent data suggests a more realistic edge of ~2%–6% alpha after accounting for reporting delays and transaction costs.
Stocks tend to outperform in the months following insider purchases, especially in small-cap names and during periods of heavy “cluster buying,” while insider selling remains a weak and unreliable signal.
Want some real-world examples to help put this into perspective.
Marjorie Taylor Greene disclosed multiple purchases of Amazon stock in late 2021 and early 2022 during the broader tech selloff, with transactions reported in ranges around $2,800–$3,400 pre-split (roughly $140–$170 adjusted).
What makes MTG’s trades controversial isn’t the timing alone—it’s the potential access.
Members of Congress can be exposed to regulatory discussions, antitrust sentiment, and government contract dynamics (including AWS), which creates a perception of informational advantage—even without proof of wrongdoing.
But it’s true… there’s no verified evidence her trades used material non-public info that would qualify any of this as insider trading.
However, following the 2022 drawdown, Amazon bottomed near $80–$90 (split-adjusted) before recovering to roughly $170–$190+ in 2025–2026, implying potential gains of ~100%+ from the lows and solid double-digit returns depending on entry timing.
The key takeaway is that while some high-profile insiders and politicians appear to generate market-beating returns, the results are highly dependent on timing, position sizing, and market conditions.
In practice, insider outperformance tends to be modest, inconsistent, and concentrated in specific setups—not the kind of reliable edge that can be blindly copied, but one that can still provide a meaningful advantage when used selectively.
Where Insider Trading Works Best
Not all insider trades are created equal—and the data shows the edge is highly concentrated.
While average insider outperformance is typically ~2%–6% annually, certain setups—like small-cap buying, cluster purchases, and trades following sharp declines—have been linked to significantly higher forward returns, sometimes reaching double-digit alpha over 6–12 months.
The key isn’t whether insider trading works—it’s when it works best.
Here’s where the edge is strongest:
Small-Cap Stocks
Insider trading tends to be significantly more effective in small-cap stocks—and the numbers back that up.
Studies show that insider buying in smaller companies can generate ~8%–12% excess annual returns, compared to just ~2%–4% in large-cap names.
The reason is simple: small caps receive far less analyst coverage, often have limited institutional ownership, and operate with much higher information asymmetry, allowing insiders to act on insights the broader market hasn’t fully priced in yet.
This inefficiency shows up clearly in performance data.
After insider purchases, small-cap stocks have been found to outperform benchmarks by 5%–10% over the following 6–12 months, especially when combined with other strong signals like cluster buying or large position sizes.
In short, the smaller the company, the more valuable insider information tends to be—and the more meaningful the potential edge for investors tracking these trades.
Cluster Buying (Multiple Insiders)
When multiple insiders buy shares around the same time, the data shows the signal becomes significantly stronger.
Academic research has found that “cluster buying” can lead to abnormal returns of ~5%–15% over the following 6–12 months, compared to much smaller gains from single-insider trades.
In some studies, stocks with multiple insider buyers outperform those with just one insider by 3%–6% on average, reinforcing the idea that coordinated activity carries more informational weight.
This pattern suggests more than coincidence—it reflects shared conviction and internal alignment among executives who likely have different perspectives across the business (finance, operations, strategy).
When several insiders independently decide to buy, it increases the probability that the stock is materially undervalued or positioned for a catalyst, making cluster buying one of the most reliable signals in insider trading data.
Opportunistic Trades
Not all insider trades carry meaningful information—and the data clearly shows that opportunistic trades drive the majority of outperformance.
Research finds that open-market insider purchases (where executives use their own money) outperform significantly more than trades tied to compensation plans, with excess returns often in the range of ~4%–8% annually.
In contrast, routine transactions like stock grants or automatic selling programs show little to no predictive value.
Trade size also matters.
Larger insider purchases—especially those representing a meaningful percentage of an executive’s net worth or salary—have been linked to stronger forward returns, sometimes outperforming smaller trades by 2%–5% over the following year.
When you combine open-market buying, sizable positions, and trades outside pre-scheduled plans (like 10b5-1 programs), the signal becomes much clearer: these are high-conviction bets, not routine financial decisions.
Industry Expertise
Insiders tend to outperform most when trading within industries they directly understand—and the data supports that edge.
Studies show that insiders trading in their own sector can generate ~3%–7% higher abnormal returns compared to trades made outside their area of expertise.
This advantage comes from deeper knowledge of industry trends, supply chains, regulatory risks, and competitive positioning—factors that aren’t always fully reflected in market prices.
This concept also extends into the political world. Lawmakers who sit on key committees often trade in sectors tied to their oversight, raising questions about informational advantages.
For example, figures like Nancy Pelosi (tech exposure), Dan Crenshaw (energy and defense), and Ro Khanna (technology and innovation) have all disclosed trades aligned with industries they actively engage with.
While this is NOT proof of wrongdoing, the pattern reinforces the same principle seen in corporate insiders:
The closer you are to the information, the stronger the potential edge.
Can You Beat the Market by Copying Insiders?
Yes, the data suggests it’s possible to beat the market by copying insiders—but it’s far from guaranteed.
Studies show that portfolios mimicking insider purchases can generate ~2%–6% excess annual returns, with some short-term strategies capturing ~3%–5% abnormal returns within 3–6 months of disclosed trades.
However, this edge is heavily dependent on execution, and one major factor works against retail traders: timing.
Insider trades are typically disclosed with delays—often within 2 business days for corporate insiders and up to 45 days for U.S. lawmakers under the STOCK Act.
So, by the time the data becomes public, a meaningful portion of the price move may already be priced in, reducing the available upside.
In some cases, studies estimate that 30%–50% of the total abnormal return occurs before or shortly after disclosure, leaving a smaller window for followers to capitalize.
The practical takeaway is that simply copying insider trades is not enough.
The most effective strategies focus on high-quality signals—such as large open-market purchases, cluster buying, or trades near major catalysts—while filtering out routine activity.
When combined with technical confirmation and fundamental context, insider data can still provide a measurable edge, but on its own, it’s more of a probability enhancer than a standalone strategy.
Why Insider Trading Doesn’t Always Work
If insider trading has an edge, why isn’t it easy money? The data shows that while insider buying can generate ~2%–6% excess annual returns, that edge has declined over time as markets have become more efficient and information spreads faster.
In fact, some studies suggest insider alpha has compressed significantly over the past few decades, with a growing portion of returns being captured before trades are even disclosed.
Another key factor is that not all insider trades rely on unique information.
Research shows that a meaningful share of insider activity is driven by publicly available signals—like industry trends, macro conditions, or sentiment shifts—meaning outside investors can sometimes reach similar conclusions without insider access.
On top of that, performance varies widely depending on who the insider is.
For example, CEOs and founders tend to generate stronger abnormal returns than independent directors or lower-level executives, reflecting differences in access and conviction.
Finally, real-world frictions matter.
Between transaction costs, taxes, and reporting delays, a significant portion of the theoretical edge can be eroded.
Some estimates suggest that 30%–50% of abnormal returns are lost due to these factors, especially for retail traders trying to replicate strategies after disclosure.
The result: insider trading can provide an advantage—but in practice, it’s inconsistent, diluted, and far from foolproof.
Insider Trading Around Earnings
Insider activity becomes especially relevant around earnings—and the data shows it’s not random.
Studies have found that insider buying tends to increase in the 30–60 days leading up to earnings announcements, with these trades often followed by abnormal returns of ~3%–8% in the months after the report, particularly when the company delivers a positive surprise.
This suggests insiders aren’t just reacting to price—they’re positioning ahead of shifts in fundamentals, guidance, or sentiment that the broader market hasn’t fully priced in yet.
This lines up closely with my post-earnings momentum framework. My A+ setups typically focus on strong earnings catalysts (often 10%+ moves), clean breaks of multi-timeframe structure, and continuation potential.
What insider data adds is an additional layer of conviction before the move even happens.
For example, many of my higher-quality setups—where stocks showed strong follow-through after earnings—often have underlying conditions insiders were already aware of, like improving margins, strong forward guidance, or institutional demand building beneath the surface.
From a numbers standpoint, combining insider buying with earnings momentum can materially improve signal quality.
Stocks with both recent insider purchases and positive earnings surprises have been shown to outperform by ~5%–10% over the following 3–6 months, compared to weaker follow-through in names without insider support.
In practice, this means insider activity can act as a pre-earnings filter—helping you focus on setups where the probability of sustained momentum is higher, not just the initial move.
The takeaway: When you see cluster buying or large insider purchases ahead of an earnings catalyst, it’s often a sign that the move you’re trading isn’t just technical—it’s backed by real underlying strength.
Real-World Patterns in Insider Trading
Insider trading isn’t random—data shows consistent behavioral patterns that repeat across markets, cycles, and time.
Pattern #1: Buying After Declines
- Insiders tend to buy when stocks are down
- Contrarian behavior vs retail
Pattern #2: Selling Into Strength
- Insider selling often happens during rallies
- Not necessarily bearish
Pattern #3: Clustering Around Events
- Trades increase before earnings and major announcements
Insider Trading vs Other Strategies
Let’s compare insider signals to other approaches, like momentum trading or index investing:
| Strategy | Edge Strength | Consistency |
|---|---|---|
| Insider Buying | Moderate | Medium |
| Momentum Trading | Strong | High |
| Index Investing | Moderate | Very High |
| Technical Breakouts | Strong | Medium |
👉 Trading insight: Insider trading is best used as a confirmation tool, not a standalone strategy.
Final Verdict: Do Insiders Beat the Market?
The data points to a real—but limited—edge. Insider buying has been linked to ~3%–7% abnormal returns over 3–12 months, but results are highly concentrated in specific setups.
For instance, the top decile of high-conviction insider purchases can outperform the lowest-quality trades by ~8%–12% annually, showing that filtering matters far more than simply following every trade.
At the same time, insider activity explains only a small portion of overall stock performance—often less than 5% of total return variation—with broader drivers like earnings and macro trends playing a bigger role.
The real edge isn’t copying insiders—it’s understanding why they’re buying before the market does.
If you want to go deeper:
- Explore the Trading Statistics Hub to understand how different sectors behave across market cycles
- Study real setups inside the Trade Reviews section
- Learn the framework behind high-probability setups in the Post-Earnings Momentum Strategy
This is how you turn raw market data into repeatable trading edge.
More Trading Statistics…
FAQ: Insider Trading Statistics (2026)
What is insider trading?
Insider trading is the act of buying or selling a stock based on material, non-public information. Illegal insider trading involves using undisclosed information for an unfair advantage, while legal insider trading refers to publicly disclosed trades by executives, directors, or major shareholders.
Do corporate insiders actually beat the market?
Yes—but only slightly and inconsistently. Data shows insider buying has historically generated ~2%–6% excess annual returns, with stronger performance in specific setups like small-cap stocks and cluster buying.
Is insider buying a reliable trading signal?
It can be—but only when filtered properly. High-quality signals like large open-market purchases, cluster buying, and trades near major catalysts tend to outperform, while routine transactions often have little predictive value.
Why is insider selling not a strong signal?
Insiders sell stock for many reasons—taxes, diversification, compensation, or personal liquidity needs. Because of this, insider selling shows little to no consistent correlation with future stock performance.
Can retail traders make money by copying insider trades?
Possibly, but it’s not easy. Studies show mimicking insider trades can generate ~2%–6% excess returns, but delays in disclosure mean 30%–50% of the move may already be priced in by the time the trade becomes public.
How long after insider buying do stocks typically outperform?
Most abnormal returns occur within 3 to 12 months after insider purchases, with some short-term gains appearing within the first 3–6 months, especially after earnings or major catalysts.
Are politicians allowed to trade stocks?
Yes—currently, members of Congress can legally trade individual stocks, as long as they disclose trades under the STOCK Act within 45 days. However, there is growing momentum to restrict or ban this activity.
Do politicians outperform the stock market?
Some appear to—but results are inconsistent. High-profile figures like Nancy Pelosi and Marjorie Taylor Greene have drawn attention for well-timed trades, but there is no consistent, proven edge across all lawmakers.
What types of insider trades perform best?
The strongest-performing insider trades tend to be:
- Small-cap insider buying
- Cluster buying (multiple insiders)
- Large, open-market purchases
- Trades ahead of major catalysts (like earnings)
These setups have been linked to 5%–15% abnormal returns over 6–12 months in some studies.
Is insider trading illegal?
Illegal insider trading is strictly prohibited and enforced by regulators like the U.S. Securities and Exchange Commission. However, legal insider trading—when properly disclosed—is allowed and forms the basis of most insider trading statistics.
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