What is cluster buying in insider trading?

Cluster buying means that multiple insiders at the same company buy shares within a relatively short period of time.

The idea is that one insider may buy for idiosyncratic reasons, but several insiders buying around the same time can be a stronger indication of internal confidence in the company’s prospects.

Cluster buying is generally considered most meaningful when: - the trades are open-market purchases - the insiders are senior executives or directors - the purchases are economically significant - the buying is unusual relative to the company’s normal pattern

Investors often pay particular attention to cluster buying because it may be a stronger signal than a single insider purchase.