• An open market transaction refers to the purchase or sale of a company’s shares by insiders of that company.

  • When making a trade on the open market, an insider must complete the relevant paperwork with the SEC to avoid violating any insider trading laws.
  • When transactions occur on the open market, external investors pay attention to them, since the purchase or sale of securities by insiders can indicate the company’s prospects.
  • There is more interest in buying shares by insiders than selling shares.