Blackout window
Also: blackout window, blackout period, trading blackout, closed window
A period during which company insiders cannot trade company stock, typically covering the weeks before an earnings release through a day or two after.
A blackout window is a company-imposed trading restriction that prohibits insiders from buying or selling company stock. The standard quarterly blackout begins two to three weeks before the quarter-end and extends until the second full trading day after earnings are released. Special blackouts apply around material nonpublic events such as acquisitions, restatements, or major product launches. The restriction is enforced by legal, not by SEC rule, but is designed to reduce insider-trading risk under Rule 10b-5.
Example: a company with a fiscal quarter ending March 31 and earnings on April 25 closes its trading window on March 15 and reopens on April 27. A director who vests RSUs during the blackout can have the administrator run sell-to-cover but cannot execute any personal sale, limit order, or transfer during that window.
Common mistake: trying to set up a 10b5-1 plan during a blackout. Plans cannot be adopted or modified inside a blackout window; they must be set up in an open window and respect the cooling-off period.
Blackout windows matter for timing RSU sales, option exercises, and charitable gifts. Map them against the vesting calendar at the start of each year.