What does code M mean on Form 4?
Code M means an exercise or conversion of a derivative security exempted under Rule 16b-3. It is not code P: underlying shares can increase without a new purchase at the current market price.
What code M means
Exercise or conversion of derivative security exempted pursuant to Rule 16b-3
An option or another derivative security was exercised or converted under Rule 16b-3.
- A Rule 16b-3 classification for exercising or converting an option or other derivative security.
- A derivative disposition in Table II connected with the underlying security reported in Table I.
- An event whose economics depend on the exercise price, award terms, exercisability, expiration, and related settlement rows.
What code M does not mean
- An open-market purchase at the current quote merely because common-stock ownership rises.
- Proof that the timing reflected an unconstrained present-market view; deadlines and contractual terms may matter.
- A complete net-share calculation unless every related acquisition, withholding, and sale row is included.
How code M appears on Form 4
Table II reports the derivative security, conversion or exercise price, transaction date, code M, disposition, exercisable date, expiration date, and underlying security.
Table I shows the resulting underlying-security holding and can include a separately coded issuer withholding or sale.
The price of the derivative transaction and its exercise price occupy different columns; they should not be blended with a market price.
Common event shapes involving code M
Exercise with no separate reviewed F or S row
Confirm how consideration was paid and whether any related row appears elsewhere before calling the sequence complete.
Exercise with issuer-facing settlement
The filing may show securities delivered or withheld for the exercise price or taxes; the explanation controls which obligation applied.
Exercise followed by a sale
Compare the number acquired through exercise, the number sold, any other withholding, and the amount held after the event.
Common misreads
- Describing the gross underlying share count as an open-market purchase.
- Treating the option’s exercise price as the price paid in a current market trade.
- Ignoring a code-F settlement or code-S sale and reporting only the acquisition side of the sequence.
Questions to ask next
What derivative was exercised or converted, and what were its grant, exercisability, and expiration terms?
How did the exercise price compare with—but remain distinct from—the market price?
Were securities delivered or withheld under code F, and what obligation does the explanation name?
Did a code-S sale follow, and how many of the underlying shares remained afterward?
Did timing follow an agreement, exercise notice, service condition, or approaching deadline?
Tesla: an exercise and net-share settlement
Elon Musk’s June 17, 2026 Form 4 reported a code-M exercise of a non-qualified stock option and a code-F disposition to Tesla to settle the exercise price.
- Code M covered 303,960,630 underlying shares at the option’s $23.34 exercise price.
- Code F covered 17,531,857 shares withheld at $404.66 in net share settlement of the exercise price.
- The filing expressly stated that the transaction involved no open-market sales of securities.
Code M FAQ
Is code M the same as insider buying?
No. M is a Rule 16b-3 derivative exercise or conversion. P is the code for an open-market or private purchase.
Why does code M show both an acquisition and a disposition?
The derivative is used up and reported as disposed in Table II, while the underlying security can be acquired or reflected as holdings in Table I.
What does M plus F mean?
It can show an exercise accompanied by securities delivered or withheld for an exercise price or tax liability. Read the explanation to identify the obligation in that filing.
Can a code-M exercise include a market sale?
A separate code-S row can report an exercise-linked sale. M itself remains the exercise classification; the whole sequence requires both rows.
Official sources
Definitions follow the current official Form 4 instructions. Filing examples link to the primary document, not a mirror or third-party summary.
- Official sourceSEC — Form 4 and General Instructions (March 2026) (opens in a new tab)
Instruction 8 supplies the official transaction-code labels; Instructions 4 and 6 explain separate rows, table placement, ownership, and explanatory footnotes.
- Official sourceInvestor.gov — Insider Transactions and Forms 3, 4, and 5 (opens in a new tab)
Official investor education covering who reports, when Form 4 is filed, and several frequently seen transaction codes.
- Primary filingSEC Form 4 — Elon Musk, filed June 17, 2026 (opens in a new tab)
Primary filing for the code-M option exercise, code-F exercise-price settlement, restricted-share terms, and explicit statement that no open-market sales occurred.
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Buteon provides market data analysis and signal interpretation for informational and educational purposes. It is not a broker, custodian, or investment adviser, and this page is not investment advice or a buy/sell recommendation. Verify the official filing before relying on any transaction description.