Thomas peterffy, director at Group of interactive brokers (NASDAQ:IBKR), made a big insider sale on Sept. 3, according to a new SEC filing.

What happened: On Friday, a Form 4 filed by the United States Securities and Exchange Commission showed that Peterffy had sold 40,000 shares of Group of interactive brokers priced at $ 64.64 per share. The total transaction was $ 2,585,600.

Following the transaction, Peterffy still holds 6,107,511 shares of Group of interactive brokers valued at $ 385,078,568.

Group of interactive brokers shares were down to $ 63.05 after Wednesday’s close.

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The importance of insider trading

Insider trading should not be used primarily in making an investment decision, but an insider trading can be a big factor in the decision to invest.

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

When a company insider makes a new purchase, it indicates that they expect the stock to rise.

Insider selling, on the other hand, can be done for a variety of reasons and doesn’t necessarily mean the seller thinks the stock is going to go down.

Important transaction codes

Investors prefer to focus on transactions that take place in the open market, shown in Table I of Form 4 filing. A P in box 3 indicates a purchase, while S indicates a sale. Transaction code VS indicates the conversion of an option, and the transaction code A indicates that the insider may have been forced to sell shares in order to receive compensation that was promised to him when he was hired by the company.

Check out the full list of Interactive Brokers Group insider trading.