Shares of Overstock.com (NASDAQ: OSTK) went up today after one of its directors increased his ownership stake in the business. The market almost always views something like this in a positive light, and that's why Overstock was up 11% as of 2:15 p.m. ET on Monday.

When directors or executives buy shares of their own company, it's known as insider trading. Not all insider trading is illegal; insiders naturally know information before the public, and they're allowed to buy and sell stock. And when an insider buys a stock (like Overstock director Marcus Lemonis), the market interprets this as bullish for the company.

On Oct. 27, Lemonis bought more than 40,000 shares of Overstock for $14.79 per share, bringing his total ownership stake to 147,293 shares. All told, this transaction cost Lemonis nearly $596,000. 

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Source Fool.com