Glossary · Insider
Insider conviction
A reading of insider behavior — cluster buying, executive ranks involved, dollar amounts relative to compensation — used to gauge management's belief in the company.
Insider conviction is not a regulatory term but a market-research concept. It looks at the pattern of insider buying: how many insiders bought in a short window, whether senior executives (CEO, CFO) bought as well as junior ones, whether buys are at market or via options exercise, whether dollar amounts are large relative to insider compensation. Open-market purchases by multiple insiders at the same time — 'cluster buying' — is typically the strongest conviction signal.