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In general, I'm trying to find some information that I think might be reported in SEC filings or is otherwise in the public domain, but I do not know where to look. The scenario is best illustrated with the following example.

I noticed an unusually high volume for a particular stock that occurred about a month ago, but for which there was very little fluctuation in the price of the stock. On that particular day, about 16% of the outstanding shares of the company changed hands. The average daily volume for the company, however, is around 1% of the outstanding shares. It seems to me that no stock is so liquid. Therefore, I'm assuming that there must have been a public offering, some dark-pool order was executed, a large number of options were executed, or an insider must have declared a purchase ahead of time. This is because the above possibilities would not come as a surprise to the rest of the market, since knowledge of these activities would either be made public after the fact or beforehand. How can one figure out which of these types of events was responsible for the surge in volume? I was thinking that there might be some sort of SEC filing that could be checked...

What I have discovered so far:

Apparently, S-3 filings with the SEC disclose public offerings of shares by a company. However, I am not sure what would happen if the stock was not part of such an offering.

Edit I've edited the above question to remove references to any specific stocks/symbols.

  • Possibly, this question has no answer. However, perhaps there is a list of things that can be ruled out. For example, if there were no SEC filings of a particular number, then maybe no one person/entity purchased 10% or more of the company on that particular day. References to the specific stock symbol and company can be removed if that would be preferable... – Andrew Jul 19 '14 at 1:32
  • Okay, I've gone ahead and removed references to any company/symbol from the question. – Andrew Jul 19 '14 at 2:12
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Schedule 13D (or the abbreviated version, schedule 13G) would be the most likely place to find this info.

When a person or group of persons acquires beneficial ownership of more than 5% of a voting class of a company’s equity securities registered under Section 12 of the Securities Exchange Act of 1934, they are required to file a Schedule 13D with the SEC.

Schedule 13D reports the acquisition and other information within ten days after the purchase.

Any material changes in the facts contained in the schedule require a prompt amendment.

You can find the Schedules 13D for most publicly traded companies in the SEC’s EDGAR database.

A 1% change in the amount of ownership is considered material.

  • Thanks Dan, is a Schedule 13D required if the stockholder already owns more than 5% of the stock and then purchases or sells additional shares? – Andrew Jul 23 '14 at 0:17
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    @Andrew, it would if it's a >1% change (I updated the answer to include this). – DanTilkin Jul 23 '14 at 15:54
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The reality that the share price did not move shows that there is nothing nefarious going on. It is most likely some mutual fund offloading their position to another fund.

You can commonly see the play out at market openings if you have access to level II data. You will see a big block sitting on both sides of the same bid/ask. If you put in a higher bid (or vice versa) the two positions will move to match yours. And when the market opens their trade will be transacted BEFORE yours, even though you are thinking ... 'well I put in my bid first'. Obviously they have agreed to swap and agreed to use whatever value the market decides.

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SEC forms are required when declaring insider activity. An insider is defined by the SEC to be a person or entity which (i) beneficially owns 10% or more of the outstanding shares of the company, (ii) is an officer or director of the company, or (iii), in the case of insider trading, does so based on knowledge which is not otherwise publically available at the time. At any rate, the person or entity trading the stock is required to file certain forms.

Form 3 is filed when a person first transitions into the status of an insider (by becoming an officer, director, or beneficial owner of a certain percentage of stock).

Form 4 is filed when an existing insider trades stock under the company's symbol.

Form 5 is filed when certain insider trades of small value are reported later than usual.

*More information can be found at the SEC's website.

Another possibility is that a large number of options or derivatives were exercised by an officer, director, or lending institution. In the cases of officers or directors, this would need to be declared with an SEC form 4. For an institution exercising warrants obtained as a result of a lending agreement, either form 3 or 4 would need to be filed.

In addition to the above possibilities, username passing through pointed out a very likely scenario in his answer, as well.

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