Primum facere, deinde philosophari

So You Want To Trade For A Living...

Jonathan Hoenig: The 80/20 rule
"One of the most influential — though seldom mentioned — economists of the 20th century was Vilfredo Pareto, an Italian who in 1906 developed a simple mathematical formula now widely known as the 80/20 rule. Although other scholars have subsequently refined it, the basic idea remains the same: In almost all cases, the vast majority of the results are created by a small number of causes.
Although it's most commonly applied to sales and management issues, the 80/20 rule applies to trading quite well. Despite the high premium often placed on being a good stock picker, I've found that the vast majority of profits come from a small handful of trades. And while picking a stock that drops isn't fun, it's the cost of doing business and can't be permitted to derail one's confidence. The best traders are selective in where they put their money to work. They can't bet on everything; what counts is focusing on only their top ideas.
As I always point out, the point of investing is to make money. It would be quite convenient if every investment rose a comfortable 10% — but in reality, it's always a small handful of big winners that account for the majority of a portfolio's overall return.
The lesson of the 80/20 rule is to focus on the 20% that actually matter. While many stocks go nowhere at all, investors who have the patience to let their winners run will usually find two or three trades a year that can rise 50% or more. A relatively small amount of risk capital produces the lion's share of the overall gain.
Of course, traders never know in advance which investments will be the important 20%. Some are intent on making money with a specific stock; it's the flexible traders who don't fight a trend, but follow it. Although they were certain that XYZ was the next big thing, if the market isn't confirming this suspicion, good traders are humble enough to move on.
Just as only a small percentage of winners will garner big gains, the 80/20 reality of trading is that an equally modest number of trades ever become winners in the first place. In my experience, I'd say close to 80% of my total trades are either break-even "scratches" or downright losers. I'm "right" only about 20% of the time. But by focusing on keeping the losses small, the relatively few number of winners more than make up for the stocks that drop or go nowhere at all.
Of course, what usually cripples investors isn't the market, but their own self-destructive loss of discipline. Because many of trades will be downright wrong, investors must to learn to emotionally let themselves off the hook. Yet what motivates many traders isn't making money, but being right. So when XYZ moves five points against them, they don't just chalk it up as a loss and move on, but obsessively add to the position, intent on saving face more than money. I've been there, and trust me: You inevitably end up losing both.
The lesson of the 80/20 rule is being able to handle the 80% of trades that don't work out. Being wrong, even on a majority of trading ideas, matters only to the extent that the trader can't deal with it. As a veteran of far too many shame spirals, let me tell you: A disciplined approach beats going from the gut every time. Remember, it's managing the trade — not simply picking a stock — that has the biggest impact on the bottom line. Repeat this to yourself often enough, and dumping an investment becomes as mundane as taking out the trash.
There are thousands of investment options out there — and some people act as if it's their constitutional responsibility to have positions in as many of them as possible. This results in far too many portfolios being a patchwork of ideas rather than a few strategic themes. There's a big difference between being diversified and being disorganized.
As I often point out, traders can't invest in everything. Selectivity is crucial. Trading for the mere thrill of it results in far too many suckers' bets. It's a losing approach.

Out of the total number of trades I consider, I focus on only the top 20% of my ideas. It's just too expensive and time consuming to put money to work on anything but my best.
So don't just buy a stock because you know the company, like its product or hear it mentioned on cable TV. To quote Gordon Gekko, "I look at a hundred deals a day...I choose one." You should be equally discriminating. The trades I make are those I feel compelled to make out of my own selfish interest. They don't just excite me — they keep me up at night.
Although the 80/20 rule wasn't developed for traders, it's relevant nonetheless. Whether you're evaluating your profits, trades or ideas, the lesson is always the same. First, focus on what matters. Next, run with it."

Jesse Felder: shooting fish in a barrel

"...The reason phenomenal investors are able to forego diversification like this is because their skill set is different. They are capable of doing the research such that they can have a high level of confidence in an idea. And when they are very, very confident about an idea they can afford to swing for the fences because their batting average with high confidence ideas is very, very good (and, probably even more important, they’re also willing to admit when they’re wrong and get out quickly). And why put any money into anything else when you have one really, really good idea?
Most investors can’t do this simply because they just don’t have very good batting averages. So bridging the gap between being an average investor and being a phenomenal one is first raising your batting average. This requires both knowledge and experience. The second step is trusting your knowledge and experience when you find a high confidence idea (while also limiting the damage when you’re wrong)...

...Bridging the gap between being an average investor and phenomenal investor is a process. The average investor should be diversified in order to protect them from their own lack of investing skill. But the phenomenal investor throws it out the window and says I’ll just be in cash until there’s a trade opportunity so compelling that I simply can’t resist. Then I’ll back up the truck..."

DynamicHedge: "I want to touch on a couple reasons why momentum works and why I see it as one of the few durable edges in the market. With markets becoming more efficient every year, and edges coming and going faster than ever it’s important to understand principles. Momentum is a principle that can be used as a pillar of strategy development for trend following or swing trading.
Markets trend. End of story. When news comes out on a stock, prices do not instantly reset to a new equilibrium price. Sometimes stocks gap on the news release but they often undershoot and continue to trend toward what eventually becomes a new fair value. Overshooting the equilibrium price also happens but is far more common in the most mature large market cap stocks and news after a prolonged run. There are a million variations, models and theories we can debate.
When price trends to the upside it can take a long time to develop and continue for long periods of time. Sometimes trends turn into manias and markets overshoot on the upside. There is a good reason for this. On the downside, prices can be quick to reset but are equally slow and often stubborn to trend lower and then often cascade once momentum is achieved to the downside.

Point number one: Upside momentum is usually slower and appears more methodical. Upside parabolic moves are the exception, not the rule.
Point number two: Downside momentum happens equally slowly but resets happen faster. Cascading downside moves are the norm, and orderly declines are anomalies.

Why does this happen?
1. Investors as a whole tend to underreact to news.
2. Investors are risk-averse to upside moves and loss-averse to downside moves.

Investors underreact in part because they anchor themselves in past events that are already well understood. Once an idea has taken hold in the mind of an investor or analyst, it’s tough to detach the old view and fully appreciate the new view. Since we have such a hard time digesting new data, trending markets can partly be seen as the digestion of information.
There is also an asymmetric risk-utility at work. Investors are risk-averse with their winners. They value gains and losses equally but prefer certainty over uncertainty. If there’s an opportunity to make certain gains as opposed to uncertain ones, the investor takes the certain gains every time. When a market is trending higher, investors have certain gains, and continually realize these gains as the market moves up. At the same time, other rational participants identify the same opportunity and buy, only to sell shortly after. This continual realization of small gains applies steady selling pressure to a market that might naturally move higher faster, thus prolonging the trend. Risk averse behavior partially explains why we see long uptrends riding the wall of worry on their way to higher prices.

When it comes to losing trades, investors are loss averse — nobody likes taking a loss. Perversely, not liking to take a loss means investors actually value losses higher than gains. Not a typo, let me explain. When a market is moving against them, investors prefer to take more risks in hopes they can make up for the loss by waiting it out. At a certain point, the risks to total wealth overwhelm the preference to not realize the loss and the investment is sold. The key here is that the losing investment is sold much lower than a corresponding winning trade. Investors don’t let their winners run the same way they let their losers run. Loss averse behavior can account for the cascading effect we see in down trending stocks. At a certain point, stocks cross an imaginary line, sentiment changes, and everyone wants to get out.
The process:
Some event or news motivates investors to buy a stock. Many others are also motivated but are underreacting to the news and either take no action or less action then they rationally should. Price moves higher, validating the risk-averse investors who took action or already own the stock and will soon sell for certain gains. The underreacting investors now become motivated to buy because prices have confirmed their thesis, and they don’t want to be left behind. Once these new buyers have a small certain gain, they sell. This process is ongoing and inches the stock up the chart. Ironically, as stocks rise, many investors interpret rising prices with increased risk. The truth is that while upside price discovery is actively occurring there is an embedded momentum mechanism to support it. In addition, if the price moves up too fast, the chase instinct engages, higher prices stop looking expensive as fear of missing gains overcomes fear of loss and you can get a parabolic move. Let me be clear, stocks can and do get too expensive over various holding periods, but active upside price discovery supports further active upside price discovery.

Think about the same process on the downside. Something happens to decrease the price of the stock. Some sell right away, and others underreact to the information and wait longer than they rationally should. The price initially moves down quickly in reaction, then slowly moves lower. Fewer investors are selling because they are loss averse and do not wish to realize the loss. As the price continues lower, selling cascades as it breaches the utility point of holding the loss for each investor. Loss realization coupled with lower liquidity sends price overshooting to the downside. As prices decrease, investors believe that there is less risk in the stock because “news must be priced in by now” and are constantly baffled by how unreasonably low prices are getting. As downside price discovery is actively occurring, support is only definable by the available liquidity. Selling will not stop until the most loss-averse investors realize their losses and move on or buyers with a different time frame intervene. Stocks that are objectively cheap can and do get cheaper.
Hopefully, the mechanics of momentum make more sense. This article represents a simplified illustration and I purposefully left out variables around short sellers and the vagueries of understanding the motivations behind different classes of investors (retail vs institutional, momentum traders vs value investors)."

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Austin Kirk: "Traders hear the terms “buy fear and sell greed” over and over again. However, these sayings are meaningless outside the context of specific price action.

Fear is not a buy signal. Fear can set up a dip buying signal with a good risk/reward ratio, or a short side trade out of an overbought area. Fear itself is meaningless outside of quantified signals.
Greed is what causes breakouts of ranges and big uptrends. Greed can cause bull markets to last longer than actually makes sense. You can’t sell greed short until it goes overextended, and shows signs of reversing.
Fear and greed are the primary influences that drive trends. The majority of traders and investors make personal decisions based on their own pain and greed threshold, rather than macro-economic and fundamental valuations.

You can’t trade emotional noise until it gives you a quantified signal."

There are no shortcuts to any place worth going...

                                                                             Why Trading Financial Markets Is So Difficult

The Real Fight Is Within: Mental Hygiene II

                                                                           *** Updated Strategy &Trading VIDEOS Weekly Forecast

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Sollte dir dieser Strand gefallen, dann kannst du deinen Freunden behilflich sein, indem du sie über Fred & EntendanceInvestors Beach informierst.
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The ignorance and the presumption always travel in the same compartment. The wisdom and the humility too. But on another train. -S. W. Field

(L'ignoranza e la presunzione viaggiano sempre nello stesso scompartimento. La saggezza e l'umiltà anche. Ma su un altro treno.)

(Die Unwissenheit und die Überheblichkeit reisen immer im selben Abteil. Die Weisheit und die Bescheidenheit ebenso, aber auf einem anderen Zug.)

AdamHGrimes: "Most people think trading is about having great ideas and great reasons for those ideas. I’d argue that everything else–everything that people talk about so little–those are the things that really matter.

When someone first comes to financial markets, it’s natural to want to know where to buy or short something, to want to know when something is going to go up or down. Over time, most traders begin to realize that everything else matters a lot too. What is “everything else”? Here’s a short (and partial) list of things worthy of your focus and attention:
1.How much to buy or sell. Position sizing is critical. Make one mistake here and you could be out of business.
2.What you do after you get into the trade, or trade management. I’d argue that position management is responsible for more of your results than entry techniques. It’s also a much more complicated subject, and a lot less sexy. It’s easy for me to write a blog telling you why you should buy a stock or short a currency, but once you’re into the trade complexity multiplies. Every moment is an opportunity to make many decisions: do you add to the trade? Get out? Tighten stop? Where is your initial stop? Is it for full or partial position? Will you ever widen the stop? Take partial profit? Reduce the trade at a loss? Plan to add to the trade at a later time? Hedge the trade? The list goes on and on.
3.Discipline. You must be consistent. The market is very random, and your results will have a wide degree of variability. The only defense you have is to be as consistent as you can in your behavior.
4.Process. What do you do and how do you do it? Who are you, as a trader? How does trading fit into your professional and personal life? All of these are questions that are addressed in your process, and you better have one.
The list could go on and on, but I would challenge you to think about where you put your time and attention. How much of your focus is on ideas for trade entry? How much time do you spend thinking about everything else, and what can you improve? Sometimes very small adjustments can make a big difference.
It’s not what you think: most people think trading is about having great ideas and great reasons for those ideas. I’d argue that everything else–everything that people talk about so little–those are the things that really matter. Those are the things that are going to create your success, and ensure a long and enduring career in the market. Where is your focus?"

Joshua M Brown: Big one-day rallies and price swings are characteristic of downtrends, not bull markets. Before you get excited about the big reversal…

More here

“I realized that every time I had a loss, I needed to learn something from the experience and view the loss as tuition at the College of Trading. As long as you learn something from a loss, it’s not really a loss.”

“When your account has these massive swings up and down, there’s a tendency to feel a rush when the market is going your way and devastation when it’s going against you. These emotions do absolutely nothing to make you a good trader. It’s far better to keep the equity swings manageable and strive for a sense of balance each day, no matter what happens.”

“I probably do more mental exercises now than I ever did. Each morning while I’m driving to work, I make a conscious effort to relax. I mentally rehearse any conflict that might happen that day. The process of mentally organizing and relaxing before I get to work helps me start my day in a very positive frame of mind.”

“Also, it helps if you view your life as a movie. If you go to a video store and rent a horror movie, you’re voluntarily letting yourself be horrified, and it’s not stressful because deep down you know it’s just a movie. What if you had the same attitude about life?”

“I think investment psychology is by far the most important element, followed by risk control, with the least important consideration being the question of where you buy and sell.”

– Tom Basso

Mental Hygiene VI 

"You’re never going to save everyone. There are some people that are never going to get it. It’s sad, but true.
There will always be investors that can’t help themselves or get out of their own way.
I used to think everyone could be saved if they would only learn. But changing behavior is simply too difficult for many.
In order for one group of investors to prosper, another group has to fail. It’s an unfortunate truth of the financial markets."
-Ben Carlson

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* Adapting to changing markets
* Building on strengths
* Cultivating creativity
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Mental and spiritual preparation VII

Investor psychology is an interesting phenomenon to study. Despite the obviously negative implications, a large percentage of investors have a tendency to buy high and sell low. When the price has been rising and everyone is bullish, they decide to jump in near a top. When prices are dropping sharply and everyone is selling, they get fearful and decide to exit their positions near the bottom.
Herd mentality, or mob mentality, describes how people are influenced by their peers to adopt certain behaviors, follow trends, and/or purchase items.
Investors looks for social proof around them. If they see others making money buying certain sectors or stocks, they decide it must be a good time to buy and they follow the herd. And if everyone is selling, they panic and decide it must be a good time to sell. This is a recipe for financial disaster.

Investors like making money, but hate losing money a lot more. The good feeling of a 50% gain is not nearly as intense as the bad felling of a 50% loss. This is why when there is a large drop and money is lost (on paper), investors are shy about buying more and freeze up at exactly the moment they should be buying. Still feeling the sting of a decline, investors rush to exit their positions for fear of losing more, regardless of the fundamental and technical factors.

And on the other end of the spectrum, most investors buy when prices are high because they haven’t lost anything and feel good about paper gains they have generated. They also feel good about the future direction, because the most recent direction has been favorable. As emotional beings, we buy when we feel good after gains (greed) and sell when we feel bad after losses (fear).

Human emotions have a huge impact on the markets, distort prices and create opportunities. In poker, players that do not allow their emotions to get the best of them (avoiding tilt) are almost always going to outperform emotional players. It is the same in the investing world. The more you are able to invest as a rational, fact-based, data-based investor and less as an emotional being, the more success you are likely to experience. This means being able to go against the herd, avoiding any feelings of discomfort from not going with the crowd and aligning with your peers.
Successful investors must find the fortitude inside to be a contrarian and run against the herd. Successful investors will buy when others are fearful and sentiment is negative and sell when others are greedy and sentiment is positive. It is difficult to do, especially when you first break the mold and force yourself to do the opposite of everyone else around you. -Jason Hamlin

Day Trading Belief 1. Anything Can Happen

Day Trading Belief 2. You Don’t Need to Predict to Make Money

Day Trading Belief 3. Wins and Losses Are Randomly Distributed

Day Trading Belief 4. Your Strategy Simply Indicates One Outcome Has a Slightly Higher Probability Than Another

Day Trading Belief 5. Every Moment in The Market is Unique

5 Beliefs You Must Accept to Improve Day Trading Performance

"...I regularly get emails from people who don’t have major assets to invest and wonder what they can do to protect themselves. Wealth protection is all relative. Many people can afford to spend say $40 per month or more to buy 1 gram (1/30 of an oz). If you do this every month for a few years you will have built up a nice little nest egg as the gold price goes up many times from here. Thus there is no excuse not to save in gold even for people with less capital.
The risks in the financial system and world economy are now at an extreme and it is most likely that one of several of these risks will turn into serious problems for the world in the next few months."  ***Gold is for the wealthy as well as for the less wealthy

There are risk-averse traders who never make significant money. There are risk-seeking traders who blow up. Then there are smart traders who take calculated risks. They make selective bets. Like the skilled poker player, they know when they have a good hand and they know how and when to bet that hand.
But to take calculated risks, you have to know how much risk you're truly taking. Several factors impact the risks in your trading:

* The sizing of your positions - It's not uncommon for small traders to have big dreams and take positions that are unusually large for the amounts of capital they're trading. Any trader can experience strings of losing trades merely by chance. When position sizes are too large, those strings of losers incur a risk of ruin. Once you're down 50%, it takes a doubling of remaining capital just to return to break even.

* The volatility of your markets - Volatility can change dramatically from day to day, week to week, depending on the participation in your markets. This can be particularly true around major events, such as central bank meetings, earnings reports, etc. You want to size your positions, not only for the current volatility of the market you're trading, but also for the expected "vol of vol": the expectable variation in volatility over the life of your intended holding period.

* The correlation of positions you are trading - When the positions you are trading are negatively correlated, the overall risk in your book can be smaller than the risk associated with each of the positions. Conversely, when you trade multiple positions that become correlated, your total risk exposure can grow exponentially. Some short-term traders only hold one position at a time, but can experience correlation-related risk if they habitually lean one way in markets (long or short, for example). They end up taking bets that are not truly independent ones. Traders of individual equities often treat their positions as independent when, in fact, those positions can respond very similarly to large moves in the overall market.

Risk is important because it impacts trader psychology. If the amount of risk you're taking dramatically expands or shrinks, you're likely to react to the change in the ebb and flow of your P/L. In order to take calculated risks, you have to be able to estimate and calculate risk--and the possible ways risk can shift over time. We often think of trades as directional bets, when in fact they are also implicit bets on *how* markets move.

***7 Impossible Trading Rules To Follow

"...When starting out investing, one of the first important words you learn is transparency, which is essentially being able to see clearly how the company functions, who manages it, how it earns money and perhaps even more important how it loses it.
You can follow the OTC stocks at otcmarkets.com, which separates stocks into different market levels based on their transparency. This categorization is more about how much information is available and does not guarantee a stock’s success or failure, or that it’s a good or bad company. However, if more information is better for keeping the perspective on a company, then you may consider this ranking as a starting point. If you belong to an online brokerage firm, it will indicate whether the stock is over-the-counter or an exchange-listed one.
The following tiers of the OTC are based on overall transparency and reporting requirements, information available, etc. It does not list all of the requirements for each tier. It’s also not a qualitative designation and the essential thing to remember is that important information can be withheld. There are exceptions, but as a rule, the lower the listing, the lower the transparency.
OTCQX is the highest tier of the three-tiered OTC markets. As defined by the OTC Markets, OTCQX “is for established investor-focused U.S. and global companies.” The SEC imposes more stringent financial and reporting requirements on the OTCQX stocks than the tiers below.
OTCQB is the second tier of the OTC markets and “is for entrepreneurial and development stage U.S. and international companies unable to qualify for OTCQX.” The OTC Markets further indicates that “companies must be current in their reporting and undergo an annual verification and management certification process.” Additionally, companies on the OTCQB must meet a minimum bid price test and cannot be in bankruptcy.
OTC Pink, with pink being a historical reference to the color of the pages that prices at this tier were quoted on, has the lowest level of reporting requirements. According to the OTC Markets, companies on this listing are “there by reasons of default, distress or design.

Beyond these three tiers, there are three additional marketplace designations that potential investors need to understand.

The OTC Bulletin Board, an interdealer quotation system, is for subscribing members of FINRA. Proprietary quotations can be entered into the OTCBB and updated in real-time. Members that submit quotes must comply with FINRA’s rules and regulations.

OTC Grey Market designates stocks that are not currently traded on OTCQX, OTCQX or OTC Pink, but broker-dealers may still be trading them without an exchange or interdealer quotation system. Because there is no centralized information on these trades, there is virtually no transparency when it comes to stocks trading the OTC Grey Market. Be wary of stocks in this category.

Caveat Emptor designates companies that have serious discrepancies and irregularities in their reporting. These could be companies on paper only or outright scams. On the OTC Markets, Caveat Emptor stocks are branded with the skull and cross bones symbol, i.e., “Buyer beware.”

More at Market 101 – Introduction

AdamHGrimes:
"There are so many things we can’t predict; surprises, good and bad, happen. Sometimes these surprises can have a dramatic impact on our positions. One of the core tasks of trading is to respond to new developments and shifts in the market, but it’s also important to do what we can do reduce the number of surprises. Too many times, developing traders are hit by things they could and should have seen coming..."

***Trading macro events and reports (part I)

"Every day, we are hit with economic reports, earnings for stocks, speculation, opinion, and a flood of other information. Some of these events move markets; some are non-events. How can we manage the volatility around these reports and what do they mean for the tactical/technical trader?"  *** Trading around macro events (part II) *** Here’s what to actually do around events and reports (part III)

A summary of the basic SEC documents you should know
Filing Requirements
All public companies are required to file financial documents with the SEC, unless they meet certain exemptions.
Public companies can be exempted from filing the standard SEC forms if they have less than 500 stockholders and have less than $10 million in total assets. Exceeding either of these criteria requires them to file.
However, non-filing companies are required to provide shareholders with financial information on request. If you own stock in a non-filing company, you can call them and ask for financial data.
All other companies must file regular reports of all kinds with the SEC. Since 1996, these filings must be made in a HTML format in order to be easily stored in the EDGAR database operated by the SEC. There are numerous sources on the Internet for accessing these electronic filings.
Registration Forms
S-1 and S-2 forms are the initial filings by a private company that intends to become public. The filing of this form is the first step in an IPO. The forms require disclosure of the current owners of the stock, the past revenue and earnings history, a description of the business plan, all known risks associated with the stock (many of these are boilerplate), and the company's intentions for the capital raised.
S-1's are typically filed first with blanks for such things as the number of shares to be sold and the price. An S-1/A is filed when these blanks are known.
A 424A or 424B filing is an amendment to the original S-1 or S-2 filings but which contains an substantial change other than filing in the blanks of the original S-1.
An S-4 filing is used for new securities issued when two existing public companies merge or combine businesses.
Financial Reporting Forms
10-K The annual financial filing form required of all companies. The 10-K is the single most complete description of a company, with a complete description of all risks and history of the business.
The 10-K must be filed within 90 days after the closing of the company's fiscal year.
10-Q The 10-Q is the quarterly filing of financial reports. It often does not have the three year history of financials as the 10-K does, though some companies include this.
The 10-Q must be filed within 45 days of the closing of the quarter. There is no 10-Q for the fourth fiscal quarter, as the 10-K fulfills this function.
Amendments to previously filed 10-Ks and 10-Qs are identified with a /A as in 10-K/A.
When either of these forms cannot be filed on time, the NT 10-Q or NT 10-K form is filed, which grants the company a 45 day extension.
Material Events
Whenever a material event occurs, the company must file a Form 8-K describing the event and its possible effect on the company's business. By the very nature, 8-K reports have no schedule. A material event includes such things as bankruptcy, a lawsuit, a merger, resignation of a key officer or director, patent denial, or other significant event.
Insider Transactions
Insider is a general term for officers and directors of a company. However, most insider rules also apply to shareholders who have more than 10% of the company's stock.
Restricted stock, in general, is stock which has been purchased in any way other than a public offering. There may, or may not, be actual restrictions imposed by the company or underwriters on how the owner can dispose of the stock (often there are). However, for SEC purposes, restricted stock means stock sold directly by the company to an investor in a privately arranged sale and which has not been registered with the SEC for public sale. Exercise of stock options generally do not fall into this category, as the company registers the entire stock option plan.
Form 144 filings reports the proposed sale of any restricted stock. While this includes company insiders, it also includes anyone who owns restricted stock, as defined above, regardless of how many shares are sold.
It is important to note that many insider trading reporting agencies list filings of Form 144 by directors and officers, but do not include Form 144 filings by unaffiliated shareholders.
It is also important to note that the filing of a Form 144 does not obligate the filer to sell any or all of the shares listed. The filer has 90 days in which to make the transaction, or portion of it. If the 90 days passes without a transaction, a new Form 144 may be filed.
Form 3 filings state the ownership totals for a new officer, director, or 10% owner. The form must be filed within 10 days of the event that makes the person a Form 3 filer.
Form 4 filings state the changes to an insider's holdings when they occur. The Form 4 includes purchases and sales as well as exercise of options, disposition by gift, or other transactions. Form 4 must be filed before the end of the second business day when the change occurs.
Form 5 filings are an annual summation of the Form 4 changes to give a annual summation of the ownership by officers, directors, and 10% owners.
Large Position Shareholders
Forms 13D and 13G are used to report positions by large shareholders, which is defined as any shareholder who owns more than 5% of the outstanding shares.
Form 13D is a required filing by any entity which becomes a 5% holder. This filing must be made at the time (within ten days) the holder crosses the 5% threshold.
Form 13G is the same form, but used when the person or entity is making the purchase for investment only.) Additional purchases by this holder do not have to be reported on Forms 3, 4, or 5, until the holder crosses the 10% threshold .