Severity measures how significant an insider transaction is relative to that
insider's total position. A small trade by a large holder is less notable than a CEO
liquidating 40% of their stake. Severity combines two factors: impact %
(shares traded ÷ total shares owned) and transaction value.
CRITICAL
Impact > 25% of position OR Value > $1,000,000
The insider is moving a major fraction of their total holdings or transacting
at institutional scale. This is the strongest signal — warrants immediate attention.
HIGH
Impact > 10% OR Value > $250,000
A meaningful position change or a quarter-million-dollar transaction.
Statistically correlated with upcoming material developments when executed outside 10b5-1 plans.
MEDIUM
Impact > 2% OR Value > $50,000
Noteworthy but not alarming. Routine compensation exercises and
small rebalancing trades typically fall here.
LOW
Impact ≤ 2% AND Value ≤ $50,000
Minimal position change. Often automatic plan transactions,
tax withholding, or fractional share adjustments.
10b5-1 Plans: Trades executed under a pre-scheduled 10b5-1 plan
(dot = green) are less informative as signals because they were set up weeks or months in advance.
Unplanned trades (dot = grey) carry higher predictive weight, especially at CRITICAL/HIGH severity.