A quantitative metric evaluating the overall bullish or bearish bias of corporate leadership.
Definition
Insider sentiment is an aggregated score derived from the net capital flow of corporate insiders over a specific period. It is calculated by isolating high-conviction transactions (open-market buys vs. unprogrammed open-market sales) and weighing them by volume and executive rank.
Why it matters for Whale Tracking
Raw insider data is noisy. Sentiment scoring provides an immediate, actionable metric for institutional algorithms and retail traders to quickly gauge whether leadership is accumulating or distributing equity.
Real-World Example
"If a company sees $5M in open-market purchases by the CEO and only $500K in sales by lower-level VPs over 30 days, the sentiment model will classify the stock as having 'Net Accumulation' or a heavily bullish bias."