Where CEO purchases are reported
A company's CEO, its other officers, its directors, and anyone who owns more than 10 percent of its shares are insiders under the securities laws. When one of them buys or sells the company's stock, they must report it to the SEC on Form 4 by the end of the second business day after the trade. The filing names the person, their title, the day, the number of shares, and the price.
Form 4 marks each trade with a letter. P is a purchase on the market or in a private deal, paid for by the insider. S is a sale. Most other letters are not purchases at all: A is a grant or award from the company, M is an option exercise, and F is shares handed back to pay taxes. A sale can also be made under a 10b5-1 plan, a schedule the insider set up in advance.
How to follow them on Breakaway
Breakaway reads every Form 4 within hours of its filing, so you do not have to read the SEC's site yourself. The Insiders page lists the biggest recent buys by officers and directors, counting only shares they bought themselves. Each insider has a page with every company they file at and their newest trades. Each stock's page names its newest insider trade and adds up the rest.
Pro members can open the Insiders list on its CEO view, with every Form 4 on every stock, and set an optional alert when a CEO or CFO buys $1M or more of their company's stock.
How the Quality Score reads them
Insider trades are one part of a stock's Quality Score, worth up to three points either way. A purchase near the stock's 52-week low counts for more than one near its high, and a sale near the low counts against the stock harder than routine selling near a high. Breakaway shows each trade as filed and does not say whether to follow it.