Closed-Market Transaction

DEFINITION of 'Closed-Market Transaction'

An order placed by a company's insider to buy or sell restricted securities from within the company's own treasury. Appropriate documentation must be filed before the order can be placed.

BREAKING DOWN 'Closed-Market Transaction'

A closed-market transaction is simply an order placed by an insider according to the rules and regulations set out by the SEC. With a closed-market order, the insider is buying or selling shares at a price above or below the market and directly from and to the company rather than openly on the market. These types of inside trades are generally not considered significant as they do not reflect the insider's sentiment towards the company.  



Here's an example of a closed-market transaction: an insider is given the stock of a subsidiary company, and then he or she immediately sells the stock.

RELATED TERMS
  1. Open-Market Transaction

    An order placed by an insider, after all appropriate documentation ...
  2. Insider Buying

    The purchase of shares of stock in a corporation by someone who ...
  3. Form 3

    A document that must be filed with the Securities and Exchange ...
  4. Insider Information

    A non-public fact regarding the plans or condition of a publicly ...
  5. Insider

    A director or senior officer of a company, as well as any person ...
  6. Inside Quote

    The best bid and ask prices offered to buy and sell a security ...
Related Articles
  1. Managing Wealth

    What Investors Can Learn From Insider Trading

    Some insider trading is actually legal - and can be extremely telling for investors.
  2. Personal Finance

    Buy Stock With Insiders: How To Track Insider Buying

    Insider buying can be a sign that a company's stock prices will soon rise. Here's how to keep track of insider buying on public databases and websites.
  3. Investing

    Can Insiders Help You Make Better Trades?

    Find out why the trading activity of owners and executives can be a valuable trade-confirmation tool.
  4. Investing

    When Insiders Buy, Should Investors Join Them?

    Insider tracking can inform your investment strategy, but it requires research and a level head. Find out what to look for.
  5. Trading

    Keeping An Eye On The Activities Of Insiders And Institutions

    These transactions reveal much about a stock. We go over what to consider and where to find it.
  6. Markets

    Delving Into Insider Investments

    Keeping tabs on company executives can provide clues about where a stock is headed.
  7. Trading

    The Viability Of Tracking Insiders

    Insider trading use to be profitable, but can it be today? Learn if investors should be paying attention to insiders.
  8. Markets

    Insider Selling Isn't Always A Bad Sign

    Predated trades at regular intervals can instill confidence, not fear, for investors.
  9. Markets

    How The SEC Tracks Insider Trading

    We look at how the SEC tracks and tries to stop insider trading - a seemingly impossible task.
  10. Investing

    Explaining Insider Trading

    While often associated with illegal activity, insider trading actually encompasses both illegal and legal trading of securities.
RELATED FAQS
  1. What is the difference between open-market and closed-market transactions?

    Insiders often are blessed with owning a significant portion of a company's shares. This shared ownership is often in the ... Read Answer >>
  2. What exactly is insider trading?

    An "insider" is any person who possesses at least one of the following: 1) access to valuable non-public information about ... Read Answer >>
  3. Can you accidentally engage in insider trading?

    Learn why it's possible to commit insider trading by accident, and why insider trading laws create logical inconsistencies ... Read Answer >>
  4. How often should I measure my company's key performance metrics (KPIs)?

    Learn the definition of illegal insider trading while reviewing the people who can be involved and the regulations and consequences ... Read Answer >>
  5. What's the difference between insider trading and insider information?

    Learn about insider information and insider trading and the differences between the two; both involve nonpublic information ... Read Answer >>
  6. If I write a blog post about stocks I own, is that considered insider trading?

    Learn about whether writing a blog post about a stock you own is insider trading. Cracking down on inside trading is an important ... Read Answer >>
Hot Definitions
  1. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  2. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  3. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  4. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
  5. Weighted Average Life - WAL

    The average number of years for which each dollar of unpaid principal on a loan or mortgage remains outstanding. Once calculated, ...
  6. Real Rate Of Return

    The annual percentage return realized on an investment, which is adjusted for changes in prices due to inflation or other ...
Trading Center