Cluster Buying (Insider Conviction)
Cluster buying is when multiple insiders at the same company purchase shares on the open market within a short window — a stronger signal than any single insider's trade, because it's harder to explain away as one person's personal financial planning.
A single insider sale or purchase often has nothing to do with their view on the company — insiders sell to cover taxes, diversify, or fund a home purchase, and they buy for many personal reasons too. That noise makes any one filing weak evidence on its own.
Cluster buying — several different insiders, especially from different roles (e.g. a director and the CFO), buying in the open market within the same window — is much harder to explain as coincidence. It's one of the more reliable patterns in insider-trading research.
Form55's conviction component counts the number of unique insider buyers in a rolling window and weights the result by their seniority and the size of the purchase relative to their existing position. In Form55's backtests, even a small cluster of 2–4 unique buyers within 90 days has produced an average 90-day return of roughly +7.8%, with larger clusters scoring higher still.
See the Methodology page for the full conviction component weighting and how it combines with lobbying and government contract data into the overall Signal Score.