John C Small, Chief Financial Officer at Aiadvertising (OTC:AIAD), reported a large acquisition of company stock options on June 6, according to a new SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Tuesday showed that Small, Chief Financial Officer at Aiadvertising, a company in the Communication Services sector, was just awarded stock options worth 100,000,000 shares of AIAD. The options give Small the right to buy the company's stock at $0.01 per share.

Aiadvertising shares are trading up 13.97% at $0.02 at the time of this writing on Wednesday morning. Since the current price is $0.02, this makes Small's 100,000,000 shares worth $1,550,000.

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The Importance of Insider Transactions

Insider transactions shouldn't be used primarily to make an investing decision, however, they can be an important factor for an investor to consider.

In legal terms, an "insider" refers to any shareholder who owns at least 10% of a company. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

Important Transaction Codes

Investors prefer focusing on transactions that take place in the open market, indicated in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S indicates a sale. Transaction code C indicates the conversion of an option, and transaction code A indicates the insider may have been forced to sell shares in order to receive compensation that had been promised upon being hired by the company.

Check Out The Full List Of Aiadvertising's Insider Trades.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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