Data Analysis

Derivative Transaction (Table II)

By InsiderAlpha Research · Reviewed August 3, 2026

Transactions involving options, warrants, and convertible securities.

Definition

Form 4 Table II reports derivative securities such as options, warrants, and convertible instruments, including transaction code, exercise or conversion price, exercise and expiration dates, title and amount of underlying securities, and derivative holdings after the transaction.

Table II reports derivative securities and the contractual path to underlying shares. It must be reconciled with Table I to avoid double counting grants, exercises, conversions, withholding, and sales.

Related Form 4 codes

AGrant, award, or other acquisitionMExercise or conversionD/E/HOther derivative dispositions or expirations

Anatomy of Table II

A derivative row can report security title, conversion or exercise price, transaction date and code, acquired or disposed amount, exercise date, expiration date, title and amount of underlying securities, derivative holdings after the transaction, and D/I ownership nature.

Options, warrants, convertible securities, and other reportable derivatives can have different economics. A high exercise price or distant expiration date does not reveal management intent or guarantee an incentive effect.

Table II to Table I Reconciliation

A Code M exercise usually disposes of the derivative in Table II and acquires the underlying common stock in Table I. Code F can cover exercise price or tax, and Code S can record a separate sale.

Use accession, transaction date, sequence, derivative title, underlying security title, and underlying share count to link rows while preserving each code. Do not add the derivative conversion and underlying acquisition as two independent buys.

How It Appears in InsiderAlpha Data

transaction_table distinguishes non-derivative and derivative rows; security_title, Type, Shares, Price, acquired_disposed, shares_owned_after, and transaction_sequence preserve the normalized event. Derivative-specific columns require source XML or expanded schema when they are not present in a flat sample.

Quality rules should flag incomplete pairs, missing underlying share counts, amendments, and inconsistent post-transaction balances.

Derivative Event Reconstruction

EventTable IITable I / Flow Treatment
GrantDerivative acquired, often Code ACompensation context; not Code P purchase flow.
ExerciseDerivative disposed under Code MUnderlying acquired; link rather than double count.
WithholdingMay fund exercise or taxCode F remains outside Code S sale flow.
SaleDerivative or underlying soldClassify the actual S row and preserve plan context.

Primary Sources & Filing References

Why it matters for Whale Tracking

Table II is necessary to reconstruct grants, exercises, conversions, cancellations, and expirations without misclassifying them as market purchases or sales. It documents contractual exposure but does not reveal the holder's motivation.

Technical Nuance

A Code M exercise commonly produces a derivative disposition in Table II and an underlying-security acquisition in Table I. Rows should be paired using accession, transaction date, sequence, security titles, and underlying share count while retaining any F or S disposition separately.

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Real-World Example

"An option exercise can reduce Table II holdings by 10,000 options and increase Table I common stock by 10,000 shares before withholding or sale. Counting both acquisitions would double count the economic event."

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Derivative Transaction (Table II) — Frequently Asked Questions

>Is a Table II acquisition an open-market purchase?

Not necessarily. Grants, exercises, conversions, and other derivative events use their own codes and economics.

>Why reconcile Table II with Table I?

An exercise can appear as a derivative disposition and an underlying acquisition. Linking them prevents double counting.

>Does option expiration reveal executive sentiment?

No. Expiration is a contractual fact; motivation and expected performance cannot be inferred from it alone.