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Data Analysis

Net Capital Flow

The difference between total insider buying volume and total insider selling volume over a timeframe.

Definition

Net capital flow is a core quantitative metric that aggregates the nominal value of all voluntary open-market purchases and subtracts the nominal value of all voluntary open-market sales for a specific ticker over a rolling window (e.g., 30, 90, or 365 days).

Why it matters for Whale Tracking

It cuts through the noise of individual trades to reveal the macroeconomic trend of the boardroom. A positive net capital flow means liquidity is entering the stock from its own leadership; a negative flow indicates capital flight.

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Technical Nuance

Net capital flow is not just a raw sum; it is often weighted by the rank of the insider (C-suite vs. lower-level) and normalized by the company's market capitalization to provide a relative measure of insider conviction.

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Real-World Example

"If AAPL insiders buy $10M of stock and sell $15M in the same month, the 30-day net capital flow is -$5M, resulting in a 'Net Liquidation' bias."

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Fundamental Quant Thesis

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