This is called the "short-swing profit rule". Section 16(b) of the Securities Exchange Act of 1934 states that if an insider of a public company buys and sells, or on the other hand sells and buys, stock of the company within a six-month period, they have to disgorge profits from these "matching" trades to the company.

The rule is used to discourage insiders from using the information they possess to make short-term profits. Every once in a while, we come across insider transactions where the insider indicates that the transaction violates the Short-Swing Profit rule and that the insider is going to return any profits from the prior trade back to the company. Flip flopping insiders are sending us a signal that they think the prevailing winds have changed and that they are willing to give up some short-term profits to make even more money down the road.

We decided to build the flip flopper screen to identify these insiders and allow you to filter by three different time periods from the "period" drop down. Read less